Why the Chinese electric car with a 1,000 km range will become a luxury in Europe

More and more Chinese manufacturers are eyeing Europe to develop, such as MG which is already a hit there, as well as BYD, on the way to becoming the world number 1 in electric cars. This is also the case for Xpeng, but these three brands are obviously not the only ones interested in the Old Continent.

High prices at Nio

Indeed, there is also Nio, which was founded the same year, in 2014, by businessman William Li. If the firm is not yet officially present in France, it is already marketed in Europe, and particularly in northern countries such as Germany, the Netherlands or Norway. But the manufacturer, whose ET7 sedan with 1,000 kilometers of autonomy we have already been able to test, has every intention of making a bigger place for itself with us.

However, it might not be as simple as expected, and a particularly large obstacle could stand in its way. This concerns customs duties, which have increased significantly in recent months, at the instigation of the European Union. For Nio, these are increased from 10 to 31%which has a direct impact on the price of its cars. Because these taxes must obviously be compensated in one way or another, either by a reduction in margins or by an increase in prices.

And it seems that this is the solution that was chosen by the company, whose headquarters is based in Shanghai. In any case, this is what its CEO suggests, who spoke in the columns of the site Automotive News. The latter explains that Nio will not have the choice to display particularly high prices. William Li emphasizes that “ with customs duties in Europe, the selling price [sera] practically equal to the price of a Porsche. In this case, the market becomes more and more limited ».

Concretely, this means that the Chinese manufacturer’s electric cars will have to get closer to the prices charged by the German firm for Nio to remain competitive. And above all, so that it achieves profitability, which apparently is not yet the case. Because for the record, out of the 150 brands originating from the Middle Kingdom, only two are really profitable at the moment. These are BYD as well as Li Auto, still little-known in our region but which is starting to make a name for itself.

A clear increase

Nio therefore finds itself in a difficult situation, as it is currently in full conquest of the European marketand raising your prices is probably not the best solution. Because Chinese manufacturers still suffer from a fairly average brand image, and their affordable prices are an undeniable argument to seduce but also find a place against the competition. Is the Chinese firm shooting itself in the foot? It’s possible, but does she really have a choice?

Because over the last ten months, sales of the latter have dropped 27% in Europeplummeting to just 1,513 units sold since the start of the year. It is particularly in Germany that Nio suffered the biggest drop, of around 72% due in particular to the removal of the ecological bonus. And for now, the prices of its cars have not even been revised upwards, since its ES6 SUV is starting with our neighbors from 65,500 euros.

Which currently makes it much more competitive than the Porsche Macan EV, which starts at 80,700 euros. But that might not last. At the same time, the manufacturer has seen its sales increase in Norway, a country which does not apply customs duties for electric cars. New proof that this measure is counterproductive? And this even though it could have serious consequences in Europe, while manufacturers have found solutions by producing their cars elsewhere.