In the wake of the European Commission’s recent launch of an anti-subsidy probe into Chinese-made electric vehicles (EVs), William Li, the head of Chinese electric vehicle manufacturer NIO, has voiced his hope that governments worldwide adopt an open attitude rather than resorting to isolationist measures. Li’s comments came during a media roundtable following the unveiling of NIO’s inaugural smartphone.
Highlighting the lessons to be gleaned from China’s burgeoning new energy vehicle (NEV) sector, Li stressed the importance of fostering an environment that encourages competition for the betterment of consumers and global sustainable development.
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“As a public company operating in the private sector, we are still operating at a deficit, and the selling prices of our vehicles in Europe are not insignificant,” remarked NIO’s President, Qin Lihong, during the same event. “We hope for a more simplified market environment, one that allows market forces to determine outcomes. As an entrepreneur, I hope that both governments and the private sector can positively guide the NEV sector’s growth.”
NIO, which currently holds the ninth position among electric and hybrid vehicle manufacturers in China, is among several Chinese EV makers that have expanded their operations into the European market, capitalizing on the stringent emissions regulations enforced by the European Union and China’s relatively favorable trade relations with the bloc.
The European Commission recently reported that China’s market share of EVs sold in Europe has surged to 8%, with projections indicating that this figure could potentially reach 15% by 2025. Commission President Ursula von der Leyen underscored that artificially low prices in the sector were being upheld by “huge state subsidies.” However, the Chinese Chamber of Commerce to the EU countered this claim, asserting that the industry’s advantage was not solely attributable to subsidies.
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Li expressed optimism that NIO could achieve profitability in a shorter timeframe compared to American automaker Tesla. He indicated that NIO views a 20% gross margin as a sustainable benchmark for the long term.
“We aspire to return to a two-digit margin by the third quarter and further enhance our performance in the fourth quarter,” Li stated.
NIO recently reported a net loss of 6.12 billion yuan ($839.51 million) in the second quarter of this year, marking a substantial increase from the 2.75 billion yuan loss recorded in the same period the previous year. Additionally, the company’s gross margin dropped to 1% in the second quarter, compared to 13% during the corresponding quarter in the preceding year.
