So far, Tesla has been the leader in the production of electric cars. However, there is a new Chinese startup that is looking to challenge the American carmaker. NIO, a Shanghai-based startup, has unveiled their new 7-seater electric SUV in a colorful event held in Beijing. The SUV is significantly cheaper than Tesla’s Model X. NIO will be selling the 7-seater for 448,000 Yuan which is the equivalent of $68,000. This is 50% cheaper compared to Tesla’s Model X that is selling at $127,000 in China.
NIO President Lihong Qin said that the car is going to target the middle-class market in major cities in China. The company is hoping to double the EV market in the country over the coming five to six years.
China is one of the most important markets for Tesla. The American carmaker grossed over $1.5 billion in revenues there for the first nine months of 2017. This was a massive improvement compared to the $570 million that was reported the previous year. The figures clearly show that there is a huge demand for electric cars in the Asian country.
However, NIO says that it’s not interested in going head to head with Tesla. The company noted that the US carmaker has superior technology and a relatively better product. Nonetheless, NIO is looking to take its own market share by targeting customers who would normally feel that the Tesla models are beyond their reach.
The Chinese company has been in business for only three years. It has 4,000 employees across various parts of the world including China, the U.S., and Europe. The startup has also attracted many deep-pocketed investors. NIO’s high profile investors include Tencent, one of the biggest tech companies in China. Other notable investors are Baidu and US-based venture capital firm Sequoia Capital.
The biggest challenge for electric vehicles in China is to build the required charging infrastructure. China has a very high population density, especially in the big cities. Finding enough space to install charging facilities will require a lot of innovation and planning. NIO says that it is planning to expand its charging network substantively across the country over the coming three years. The company is hoping to establish at least 1,100 charging stations by 2020.
The demand for electric vehicles in China is pushing many high-profile Chinese carmakers to invest a lot of money in this sector. The Chinese government has established subsidies to help facilitate innovations in clean transport and many automakers are working hard to take advantage.
NIO says that the price for the new 7-seater SUV was set before adjusting for government subsidy. It’s very likely that the price might actually be lower. The potential for growth in the Chinese electric car market is definitely there and Tesla has so far been leading the way. NIO wants to explore this potential even more by targeting new markets.