The Firefly prepares for takeoff.
Chinese electric vehicle manufacturer Nio (NIO) – Get a free report would be working on a project to enter the American market, although the dates are a little vague.
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“We are still in the planning stage and colleagues working on this plan are under considerable stress,” CEO William Li said, according to NeighborhoodsAuto.
Li was speaking to the media ahead of the annual Nio Day presentation on December 24 in Xi’an.
Last month, Reuters reported that a company executive said Nio was still “debating” entering North America in 2025.
Ganesh Iyer, CEO of Nio USA, said the company is considering “any type of partnership” in North America.
Nio also needs to build infrastructure before introducing electric vehicles in North America, he said.
Target Europe
As for Europe, well, that’s a different story. The company’s president, Lihong Qin, told reporters that Nio would launch its cheaper Firefly brand in Europe in 2025.
The Firefly and Alps brands will produce cars for families, with Firefly offering smaller models and competing with electric carmakers such as Volkswagen. (VWAGY) – Get a free reportRenault (RNSDF) – Get a free report and Ford (F) – Get a free report.
Alps will support three models in its initial phase, with retail activities taking place through an internet-based direct sales channel.
Li said that “right-hand drive prototypes exist, but we will first focus on understanding and establishing our capabilities in European markets.”
Additionally, Li confirmed that Nio is working on a “high-end model” aimed at further establishing the electric vehicle maker as a reputable competitor to Audi and BMW. (BMWYY) – Get a free reportMercedes-Benz (DDAIF) – Get a free report and Porsche (POAHF) – Get a free report.
“The mass market will be handled by our second brand,” explains Li. “The Nio brand will continue technological breakthroughs and innovations. Being technologically advanced is essential to creating a premium brand. The volume of this model won’t be as high as everyone hoped.
The company faces some challenges. Nio announced plans to cut 10% of its workforce last month and could cut more positions, Bloomberg reported on December 7.
Some departments have been asked to prepare reserve layoff lists, which could increase the initial number of layoffs to 20 to 30 percent within the unit.
The reductions would mainly apply to non-essential activities or those that would not generate rapid returns on investment or would require heavy investments.
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Europe considers customs tariffs
Deutsche Bank reiterated its Buy rating on Nio on December 13 and reduced its 12-month price target on the stock from $17 to $16.
The bank’s analysts said the company’s growth trajectory “appears somewhat weaker than expected, despite the ramp-up of several new models.”
“This apparently reflects a problem in its sales structure, which now needs to be significantly expanded to better compete with its traditional premium peers,” Deutsche Bank said.
“Even if we do not see strong downward pressure on demand, the emergence of this situation damages the credibility of management, even though it has just regained some of it in recent months,” analysts estimate.
Chinese electric vehicle makers are attracted to Europe because tariffs on auto imports are only 10% compared to 27.5% in the United States, independent auto analyst Matthias Schmidt told the Associated Press. Europe also has the second largest global market for electric vehicle batteries after China.
In October, the European Commission has officially launched an investigation into whether tariffs should be set to protect European producers from an “influx” of imports of cheaper Chinese electric vehicles that they say benefit from state subsidies.
Chinese officials said the investigation lacked adequate evidence and did not comply with World Trade Organization rules, the country’s Commerce Ministry said in a statement.
China also urged the EU to safeguard the stability of the global supply chain and a strategic partnership between the two, while “cautiously” implementing trade remedies.
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