Nio picks itself up after narrow escape

The year 2020 has been extremely tough for carmakers, with many forced to reconcile themselves to slumping sales, massive layoffs and even bankruptcies.

Nio is a rare and enviable exception. The leading Chinese startup, which warned its cash flow may not be sustainable for the following 12 months late last year, has raised around 13.3 billion yuan ($1.89 billion) and secured over 10 billion yuan in debt lines.

Its sales are on the up too. Deliveries exceeded 10,000 in the second quarter. In 2019, it took half a year to sell the same number of vehicles.

A coupe SUV unveiled at the ongoing Chengdu auto show is the latest entry in the five-year-old company's fruitful year.

With three trim levels, the EC6 has a range up to 615 kilometers on one charge. It is compatible with either chargeable or swappable batteries.

Nio Chairman William Li said the model, which is expected to start deliveries in September, is to take Tesla's Model Y head on. Tesla is the best-selling electric carmaker in China.

But Li is not getting over-excited about the company's sudden achievements. Instead, he's even more cautious.

"We had a narrow escape. We are safe, but only in the short term," he told reporters at the Chengdu auto show.

With being humble treasured in Chinese culture, he compared Nio to someone recovering from a critical illness.

"It is like we were in the ICU.Now we are moved into the ordinary ward and can start to stand on our feet and try to rehabilitate," he said.

But Li was quick to add that Nio is now under even more pressure than before, saying that in the past the goals were immediate, like launching a brand, or delivering a model.

"But now our challenge is to make correct decisions for future competition, but you never know what your decisions made today may mean three or five years later," he said.

Several things are clear though. One is that Nio is to sell cars in global markets and is preparing in terms of products and personnel.

Li said the company saw itself as an international carmaker when it was established in 2015.

And Nio will continue with its battery swap strategy, believing it is as important as battery charging. Currently, it has around 140 battery swap stations across the country, with one added to the list a week on average.

Li said the company will set up a battery asset management company, which reportedly will be in partnership with China's battery giant CATL.

"Imagine all of China's 200 million vehicles are electric, even if one car owner spends only 10,000 yuan on battery rental, that is 2 trillion yuan," he said.

Nio also plans to build a second plant. It has been producing vehicles at a plant co-built with JAC Motors, and the plant, which has a production capacity of 100,000 models a year, is to manufacture Nio's fourth model as well.

Li said it will need a second plant in the long run. "It is not something urgent but we are working out plans," he said.