A handful of China-made vehicles are on sale in the United States right now – the Buick Envision, Lincoln Nautilus, and Polestar 2 are just a few examples – but Chinese brands themselves have yet to penetrate the market. Blame steep tariffs, tense U.S-China relations and the general headaches of starting up a new brand in the world's toughest car market. But could Chinese automaker Nio pull it off next?
The EV startup has been eyeing the market for a while now, with CEO William Li saying in 2021 that the company planned to start selling EVs in the U.S. in 2025. Now, Ganesh Iyer, the company's CEO for the U.S. – yes, Nio has a North American headquarters and Innovation Center in San Jose, California – offered an update on the company's U.S. plans.
At the NextChina Conference in New York on Thursday, he elaborated on where the automaker is at currently. “Due to current macro-economic conditions and other perceived conflicts, we are reevaluating our market entry plan in the North American market," Iyer said.
Asked if Nio will launch in the United States in 2025, Iyer didn't sound too confident. "That's what we said two years ago, but things are changing," he said. At least for now, it looks like the U.S. market remains a tough nut to crack for Chinese carmakers. Despite attending several auto shows in the U.S. in the past and announcing plans to enter the market, Chinese automakers like BYD and Geely didn't follow through.
Gallery: 2023 Nio EL6
"My goal, and my commitment to this company, is I want all of us to buy a Nio car from our personal paycheck one day," Iyer said, according to Nikkei Asia. "I hope that 'one day' will be sooner, which means we need help from everyone - government, policymakers, supply ecosystem [and] infrastructure readiness."
Nio has a large lineup of EVs including sedans, wagons and SUVs. Among its signature benefits is battery-swapping, which has proven remarkably popular as stations seem to be growing fast – including in Europe.
Interestingly, Nio does not plan to build a plant in North America; it aims to import its premium EVs from China instead. Iyer explained that after considering local production and even shortlisting three states for plants, Nio has reached the conclusion that it is too expensive to build factories in the United States. "For our products, there are a lot of local suppliers in China who exclusively provide to us. They don't do business in the U.S.," he said.
Of course, that means Nio EVs wouldn't qualify for the federal tax credit of up to $7,500. It will be interesting to see how Nio will make that work because its EVs will likely be at a competitive disadvantage compared to rival models built in North America.
And let's not forget the elephant in the room – the 27.5 percent tariff the U.S. imposes on Chinese-made cars. In July 2023, Nio CEO William Li slammed what he called "U.S. protectionism," demanding the same access to the American market that Tesla's EVs enjoy in China. There are no signs the tariff is going away anytime soon, though.
But in recent years, electrification has leveled the playing field between Chinese automakers and established western rivals, and we can be sure that the first Chinese brand to enter the U.S. market will do so with EVs. The big question is when that will happen, and whether it will start with imports or, say, a Mexican factory.
Update Saturday 2 p.m.: This post has been updated after a Nio spokesperson reached out to clarify some of Iyer's remarks made in the original Nikkei story. "NIO is heading to the US, but we are still trying to figure out the clear timeline. Once we have it, we will announce the expansion plan at a proper time," the official said.
