By YANG Shihan
Chinese EV maker Nio is planning a franchise network in Europe for its sub-brand Firefly, Reuters reported on Wednesday. Firefly is an EV scheduled for release in Q3 next year, priced between 100,000 yuan and 200,000 yuan, aimed at Europe.
Nio said in response to Reuters’ report that its sales channel in Europe will not change. But it admitted that it is “evaluating distribution channels for Firefly in Europe”.
In Norway, Nio uses a direct sales approach similar to its domestic operations, relying on its own showrooms and platforms. It’s highly questionable whether this method provides better service for customers, it certainly costs a lot more.
In October, Nio expanded into Germany, the Netherlands, Sweden, and Denmark using a subscription-based model, akin to leasing, based on local businesses.
Previous reports suggested that Nio sold less than 1,000 vehicles in Europe in six months. Chairman QIN Lihong claims the actual figures are roughly three to four times higher. Even four times higher is still not good enough, he said.
Nio is now facing poor sales and a bleak funding environment. It looks like EV makers have had just about as much as they are going to get from the capital market until someone comes up with some impressive returns. Incalculable amounts have been sunk into EV makers whose names are not even memories anymore.
After a peak of 20,000 deliveries in July, Nio's monthly deliveries have dropped. With pressure on sales, Nio, which is still building factories and showrooms, money is tight. Cash reserves are close to 30 billion yuan, a decrease of 6.3 billion yuan from the previous quarter.
An EU anti-subsidy investigation into Chinese EVs is ongoing, so Nio is taking some big risks. CEOs can “urge” governments to adopt an open attitude as much as they like, but the politicos are interested in voters’ opinions, not those of Chinese billionaires.
Europe is the focal point for Chinese EV companies that need to expand.
XPeng is opening delivery and service centers in Norway, the Netherlands, Sweden, and Denmark. In September, Markus Schrick, the brand's Germany head, said that XPeng plans to utilize traditional dealership channels for sales in Germany and is in talks with several major chains.
