NIO is a Chinese automobile manufacturer which was premised and designed on developing electric vehicles. It is headquartered in Shanghai and was founded by William Li in 2014 who also happens to be the chairman of Bitauto, a leading provider of internet content & marketing services, and transaction services for China’s automotive industry. The same day the company was established was also the same day NIO debuted their first model; the NIO EP9 sports car which cost a total of $1.2 million to make.
NIO is also commonly known as the Chinese Tesla in the world of automobile manufacturing. In 2020, NIO, and two other Chinese electric vehicle start-ups: Li Auto and Xpeng, announced a surge in their deliveries. The surge in deliveries is also reflective of China’s overall economic recovery amid pandemic and its auto market. The Chinese government has further supported the industry through subsidies in a national attempt to push NIO to become eventual leaders in electric vehicle technology. NIO plays a significant role in some of the world’s largest economies, inclusive of China.
Despite the present-day monetary success and a surge in deliveries, NIO has also endured in financial difficulties, however, this could be argued to have been inevitable due to the lack of experience in manufacturing electric vehicles. Having been founded in 2014, NIO did not make any revenue until four years later after having lost a hefty $758.8 million in 2017. After NIO’s initial public offering (IPO), their stocks found trouble in attaining stabilisation after deliveries were escorted by surges followed by a rapid discouraging drop in numbers. The following year (2019), NIO faced a total net loss of $1.2 billion which consequently led to a loss of jobs in the North American HQ and a re-evaluation of future profit projections for the company; amid the pandemic, NIO has had further difficulty in the production and delivery of their vehicles.
However, the unfortunate premise has not reigned through to present day. NIO are hopeful to resume international expansion plans within the second half of this year as well as topping the supply and demand margins they have not met in previous years. As of today, NIO’s revenue during the second quarter of last year increased by 171.1% in comparison to the first quarter and thus, making the final figure for the second quarter of 2020 $526.4 million.
Overall, NIO is doing marginally better than the financial complications they once endured; however, they are still a long way from reaching the same numbers as Elon Musk’s Tesla. Founded in 2003 by a group of engineers, Tesla is premised on electric vehicles escorted by the use of sustainable energy. Tesla’s narrative is to one day reach a point of clean energy usage & generation, and transmission in the global use of sustainable energy.
Regarding facts and figures, Tesla exhibited more mature numbers with their deliveries having increased by 50% in 2019 which put the total figure of cars delivered at 368k cars. New heights were reached in the following year after Musk acknowledged their strength in numbers having sold close to half a million cars in 2020; five times more than all three aforementioned start-ups combined. Tesla’s alleviation in sales has not only granted Musk the title of world’s richest man but has also alleviated the competition with competing firms.
The differences between the two firms are not only observant through their annual revenue, but NIO also wants to differentiate themselves from their competitors by manufacturing electric vehicles without the necessity of having a battery: a focal expense in the making of an electric vehicle. The riddance of the battery in the manufacturing process is to lessen the expense of their cheapest model which potentially increase future revenue and increase competition with Tesla.
Conclusively, it is evident that NIO has not had a fairy-tale origin story; from a rollercoaster ride in figures to a significant loss of net profit which thereupon led to the loss of jobs in the North American headquarters. However, despite the financial hardship endured by the start-up, they are hopeful to exceed previous years in regard to sales and hopeful to resume international expansion plans with the acknowledgement of the company’s plays a focal contributing role to international economies. It is worth acknowledging competing rival, Tesla, and their growth within the last year and how this may contribute to the NIO’s aforementioned change in manufacturing and the future of other rivals within the electric vehicle industry.
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