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China’s Nio considers tapping dealers to boost EV sales in Europe – sources


China’s Nio considers tapping dealers to boost EV sales in Europe – sources

SHANGHAI (Reuters) -Chinese electric vehicle maker Nio is considering building a dealer network in Europe to speed up sales growth, three sources familiar with the matter said, even as China’s EVs face potential tariffs in the region.

Nio, an aspiring rival to Tesla with premium models, launched in Norway in 2021 and entered Germany, the Netherlands, Sweden and Denmark in October last year, allowing customers to buy directly from its stores or online or to lease the cars for as short as a month.

But the company has started assessing dealers in key European markets, two of the sources said, after the company’s president last month said sales in Europe were not meeting expectations.

The move comes as Chinese EV makers, including Xpeng, Zeekr and BYD, aggressively seek to expand in Europe, where they can sell their cars at higher prices than in their saturated home market.

One person said Nio had found that Europe had its “peculiarities”, without elaborating, and that the company was planning to expand into more European countries. Nio has been hiring in France, Italy, Hungary, Switzerland and Austria, according to Linkedin posts.

The third source said dealers were being considered both for Nio-branded cars sold in Europe as well as project “Firefly”, a new more affordable EV brand that the company is planning to export to Europe from 2025.

Another reason to use dealers would be to ease cash pressure on Nio, which is prioritising spending on research and battery swapping stations in China, that source said.

Nio said there have been no changes to the marketing and sales methods of its brand in Europe and it was committed to building a direct sales network.

Its Firefly project, however, is evaluating its channel model for Europe, including direct sales, agency or dealers.

“We will choose the model that best suits the local market and the brand’s development needs,” Nio said in an emailed statement.

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TARIFF RISK

The company is doubling down in Europe even as the European Commission considers imposing tariffs to protect EU producers against Chinese-manufactured EVs that it says are benefiting from state subsidies.

Nio, which ranks ninth by sales volume among manufacturers of electric and hybrid cars in China, does not break down its sales in Europe.

Last month, Nio President Qin Lihong told Chinese media that reports that Nio sold 832 vehicles in Europe in the first half of 2023 were incorrect and that the real operating figures were three to four times that number. But he said he was not satisfied with that.

Nio does not use dealers in China but instead relies on a direct sales model similar to one pioneered by Tesla.

As of the end of September, Nio was operating 137 Nio Houses, including six in Europe, where the company displays cars, offers test rides and has cafes and meeting rooms for its car owners.

Other Chinese EV makers have been trying a different tack in other regions as they expand abroad.

For instance, BYD has been grabbing market share in Southeast Asia by building distribution partnerships with large, local conglomerates that have allowed the carmaker to expand its reach, test consumer preferences and navigate complex government regulations in the region.

(Reporting by Zhang Yan and Brenda Goh; Editing by Sonali Paul)

 

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