NIO planned to enter the US market by the end of 2025, but current US policies are complicating things, according to William Li.
(Image: NIO videl screenshot)
Founded eight years ago, NIO has already gained an initial foothold in China's high-end car market. Now it plans to spend another eight years to become one of the world's largest automakers.
NIO wants to be one of the world's top five automakers by 2030, William Li, the company's founder, chairman and CEO, said in an interview with German media outlet Heise Autos, according to the text of the interview released Tuesday.
To achieve that goal, NIO clearly needs to launch more and cheaper models. The company is planning to enter the mass market with a sub-brand, while the NIO brand continues to maintain its premium positioning.
Demand for SUVs is currently high, but NIO is also seeing demand for small cars, Li said in the interview.
That's why there will be an NIO sub-brand with models designed for the global mass market and at a cheaper price point that will be available within two years, Li said.
"As a result, the number of cars we sell will increase rapidly and we want to be one of the top five car manufacturers in the world by 2030," Li said.
NIO said last August that the company would enter the mass market with a new brand and had already established a core team.
"The relationship between the NIO brand and this new brand is similar to that between Lexus and Toyota, Audi and Volkswagen," Li said previously.
Li said at the time that NIO's Volkswagen brand wanted to be less expensive than Tesla, but the experience would surpass the latter.
NIO plans to start delivering vehicles for the mass market in the second half of 2024 at a price of RMB 200,000 ($27,940) to 300,000 yuan, Li said in a conference call after announcing first-quarter earnings in March.
Notably, in addition to this sub-brand, which is positioned slightly below the NIO brand, the company is also rumored to be launching a third brand to target a lower-priced market.
On August 1, local media outlet 36kr reported that NIO is planning to launch a third car brand to cover the low to mid-range market below RMB 200,000.
This third brand, like NIO and the sub-brand codenamed ALPS, is independently operated with an independent head and R&D system, and is currently recruiting a core team, according to the report.
The price range of NIO's third brand is mainly in the RMB 100,000-200,000 range, 36kr quoted the source as saying.
Late last month, local media outlet Sina Tech cited sources familiar with the matter as saying that NIO's third brand would be internally codenamed "Himalaya," though this was later denied by the company.
US entry by the end of 2025
In the interview with Heise Autos, Li also mentioned that NIO planned to enter the US market by the end of 2025, but current US policy complicates matters.
"We only become active in a market when we have the right product and the right services for this region and we planned to also become active in the USA at the end of 2025," he said.
Li said the US government recently passed the Inflation Reduction Act, making it more difficult for foreign automakers to produce and enter the market.
"We will therefore monitor developments closely," Li said.
In late May, Yicai reported that NIO was hiring for positions related to building vehicles in the US, indicating the company's intention to build a new plant in the country.
"NIO should have plans to build a plant in the US. The position requires knowledge of US state policies and subsequent involvement in plant site selection in the US," Yicai said at the time, citing a person who has been involved in plant construction for Chinese car companies on several occasions.
In response to a request for comment, NIO said it had no disclosable information about building a factory in the US
Comments on Tesla
Tesla is a respectable automaker, and NIO can learn a lot from them, such as direct sales or how they have trimmed their production for efficiency, Li said.
But NIO and Tesla are two different companies, he said, adding that Tesla is focused on technology and efficiency, while technology is also important to NIO, but the company is focused on the user.
Tesla has played an important role in enabling the automotive industry to transition to electric vehicles, but despite this, Tesla is under pressure, he said.
If they can't improve their products quickly or provide good service, they will quickly be pushed out of the market, Li said.
Li believes that in order to succeed in the automotive industry, it takes staying power, which is like running a marathon.
"You don't win in the first few kilometers, but in the last few. We are at the beginning and will only know in ten years whether we will really be successful," he said.