Nio aims to become profitable by 2026
At the end of November, Nio reported just under 200,000 units and, according to Li, plans to deliver around 220,000 vehicles this year. This figure is set to double again next year, thanks in part to the new Onvo and Firefly subsidiary brands. While delivering 220,000 vehicles sounds like a success, Nio faced major financial problems more than once in its history.
However, according to Chinese media, company founder and CEO William Li recently referred to the company’s plans from 2017 and 2018, in which these results were already planned for 2022. Although the Covid-19 pandemic and all its economic consequences were not foreseeable in this long-term planning, these sales milestones still play an important role in Nio’s planning.
On the way to achieving its sales and financial targets, Nio intends to utilise two levers in particular: Nio remains determined to enter 25 overseas markets by next year, focussing mainly on the Onvo and Firefly brands. This could also result in a move away from direct sales, as Nio is already trialling with its market entry in Azerbaijan: there is mention of “more global alliances” in order to accelerate international expansion.
The second point concerns prices. Although the company sees intense competition in the transition phase from combustion engines to new energy vehicles in the years up to 2027, Nio will “refrain from engaging in price wars,” says Li. In Europe, where special tariffs are now due on imports of electric cars from China, Nio brand electric cars will probably be even more expensive in future. “Nio will be forced to increase prices close to those of Porsche’s in response to new, higher tariffs imposed by the European Union on China-built EVs,” Li told analysts, according to Automotive News. The higher Nio prices could also increase the attractiveness of the Onvo brand: “In global markets, Nio will rely more on the Onvo brand,” Li continued. Nio hopes that Onvo and the third, even cheaper brand Firefly will soon boost sales in Europe.
Nio has only sold 1,513 vehicles in Europe this year to the end of October (-27 per cent), with sales in Germany falling by 72 per cent to 338 vehicles. Norway is likely to remain Nio’s most important market in Europe in the future, where the manufacturer achieved half of its European sales with 780 electric cars. Norway is not a member of the EU and therefore does not levy any special tariffs.
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