New York-listed Nio, viewed as a bellwether of the Chinese electric-vehicle industry, narrowed the gap with US carmaker Tesla, mainland China’s highest selling electric-car marque, over the last three months.
The company, started by William Li Bin in 2014, delivered 3,226 of its ES6 sport-utility vehicles (SUVs) in September, a year-on-year increase of 87 per cent, according to the China Passenger Car Association (CPCA). In August, its sales rose 58 per cent, with the company selling 2,840 ES6s.
Tesla, on the other hand, led the sector by quite a distance last month, by a margin of 8,103, having delivered 11,329 of the Model 3 cars built at its Shanghai-based Gigafactory 3. In June, however, the gap between Tesla and Nio was wider, at 12,478, with 14,954 Model 3s sold and 2,476 ES6s delivered.
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China’s automobiles market, the world’s largest, has shown strong signs of recovery in the second half of this year following the country’s successful containment of its coronavirus outbreak. New energy vehicle sales have also rebounded, hitting 125,000 units in September, a jump of 99.6 per cent from a year ago, CPCA data showed. A slew of Chinese electric carmakers have ridden this wave and are widely viewed as challenging Tesla. They have raised US$8 billion in fresh capital from stock markets or investment funds this year.
“Strong sales over the past three months have cemented a belief among China’s home-grown new energy vehicle companies that Tesla is not unbeatable,” said Gao Shen, a Shanghai-based independent analyst covering the manufacturing sector. “Chinese carmakers, although still lagging behind their US rival, can eventually catch up if they churn out proper and affordable products for domestic drivers.”
The overall sales of passenger cars, which include sedans, minivans, SUVs and multipurpose vehicles, rose 7.4 per cent year on year to 1.94 million units in September.
Beijing last year slashed cash subsidies for such vehicles by more than half, and has launched a new initiative to promote the sales of environmentally friendly cars in rural areas. It also wants carmakers to lead the new energy vehicles sector under its “Made in China 2025” industrial master plan.
The use of new energy vehicles could accelerate in the coming years, jumping to 20 per cent of the market by 2025 from less than 5 per cent last year, JPMorgan analyst Nick Lai said in a research note on Wednesday. He raised the price target for Nio’s shares to US$40 from US$14 in August.
Nio posted a loss of 1.21 billion yuan for the quarter ending with June, narrowing down from a 63.6 per cent loss over the same period a year ago, thanks to efforts it made to cut production and marketing costs. In fact, growing suspicions about its ability to turn a profit early this year knocked its shares down to US$2.11 in March, 47.5 per cent below its close in 2019.
Its stock has, however, rebounded sharply, rising by more than 13-fold after China emerged out of the Covid-19 pandemic since April. Its shares rose another 5.9 per cent to US$28.07 on Thursday.
“They are unlikely to get closer to Tesla in terms of sales, with the US carmaker still enjoying an overwhelming advantage in consumer awareness and maturity of technologies,” said Yale Zhang, managing director of industry researcher Automotive Foresight. “But the growing market gives Chinese Tesla challengers opportunities to rise up in the coming years.”
More from South China Morning Post:
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