The Chinese new car market has been topsy turvy lately, primarily because the government keeps playing around with its NEV (new energy vehicle) incentive program. China really, really wants people to buy electric cars — either plug-in hybrids or battery electrics — but found its original incentive program was costing too much money.
So it modified the program, several times in fact, which caused confusion among car companies and customers. In general, people who are confused postpone buying decisions until things get clearer, and that’s exactly what Chinese new car shoppers did. The second factor, of course, was production shutdowns caused by the coronavirus pandemic. You can’t sell what you don’t have, or as sales professionals like to say, “You can’t sell from an empty wagon.”
NIO has announced that things are definitely looking up. According to a NIO press release, in May, it sold 2,685 units of its ES6 SUV and 751 of its larger ES8 SUV. Combined sales of 3,436 means the company sold 215.5% more cars in May of this year than it did in May of last year. (You math jocks will complain about that stat. Suffice to say NIO sold a little more than twice as many cars this May than it did last May.) So far in 2020, NIO has sold 10,429 cars, up 68% from the same period last year.
[Note: the ES8 has been substantially redesigned since it was introduced. May sales were down 31% from a year ago but were virtually nil for many months, so NIO is hoping the larger model will find more customers in coming months.]
In a statement, William Bin Li, founder and CEO of NIO, said: “In May, we achieved record-high monthly deliveries in our history. We truly appreciate the trust and support that NIO users have been giving us and we remain fully committed to the vision of building the best user enterprise by offering high-quality premium smart electric vehicles in the years to come. We are proud of our teams for their continuous efforts and determination in delivering the solid results, and we will further increase our production capacity and expand our sales network to support our future growth.”
Steven Feng, CFO of NIO, added, “We are pleased to see the strong monthly deliveries despite fewer working days due to the public holiday in May. We expect to achieve the delivery goal for the second quarter 2020, while continuously improving gross margin and narrowing operating loss.”
NIO offers battery swapping for its customers, something few other companies want anything to do with. That allows owners to upgrade their battery whenever they choose and to always have a battery with the latest technology installed. To date, NIO has completed over half a million battery swaps at its 131 swap locations in 58 cities throughout China.
It also has established a partnership with Intel — which purchased Mobileye recently. The linkagew with Intel is expected to allow NIO to offer state-of-the-art semi-autonomous driving features that customers want.
Tesla Still Dominates In China
Despite a positive sales report for NIO, Tesla continues to far outsell any other electric car company in China. Where NIO is bragging about moving 3,436 cars in May, Tesla did nearly four times that number — 11,468. For the month, the NIO ES6 was the 5th best selling electric car in China. The models between NIO and Tesla were the GAC Aion S, the Buick Velite 6, and the BYD Qin Pro.
NIO has struggled lately but seems set to survive the turbulence in the Chinese EV market. It has a new product coming soon, its EC6 midsize crossover/coupe, which will be priced below the ES6 and hopefully boost the company’s total sales.
Note: The author has a modest stake in NIO stock but promises not to let that affect his judgement when it comes to reporting news about the company accurately. : – ) He and CleanTechnica as a whole do not offer financial or investment advice of any sort. Stay safe out there.