Chinese auto brand Nio zeroes in on 7-seat electric SUV

SHANGHAI — The Chinese electric vehicle startup formerly known as NextEV gained some early credibility through its connection to Martin Leach, the former Ford of Europe president who managed NextEV’s Formula E racing team.

All about Nio

  • Vehicles In production: ES8 SUV
  • Up next: ES6 SUV, planned for 2019
  • Supercar: EP9
  • Autonomous concept: Eve
  • Manufacturing
  • Partner JAC Motors builds the ES8 and will build the ES6. At the Nio plant in Shanghai, scheduled to open in late 2019, the company will build a 3rd mass-market vehicle.
  • Battery facts
  • Customers pay a monthly fee of about $200 to rent the ES8 battery pack from Nio, but they also get a discount on their vehicle purchase. Nio has stations in 4 cities that allow consumers to exchange battery packs in 3 minutes; many more are planned.
  • Investment
  • Funding: $3 billion to date
  • Primary investor: Tencent Holdings
  • Plans for an IPO have been reported but not confirmed.
  • Fun feature: NOMI, billed as the world’s first in-car artificial intelligence system, opens windows, plays music, dictates directions, provides the weather and more — on command.

Sources: Automotive News research; Justin Kuo, investor relations associate

Before he died in 2016 at 59, Leach had helped sketch a vision for a Tesla fighter for China, a project that carries on under Nio, the new name for NextEV.

A strong Ford connection continues with Nio’s 60-year-old co-founder and executive vice president, Jack Cheng. He is also CEO of XPT, an advanced technology company that works on e-propulsion platforms for EVs.

The Taiwan native spent much of his career in purchasing — primarily with Ford. More recently, he was with Fiat Chrysler Automobiles in China.

Today, his focus is on that Tesla fighter, Nio’s ES8, a seven-seat SUV that starts at about $69,000, before credits. (A Founders Edition lists for $84,500.)

This final week of June marks a big push for deliveries. Three hundred ES8s are scheduled to end up in customers’ hands by the end of the month, up from just 10 until now.

An early June visit found Cheng marveling at the forces that, since 2014, have taken the company from infancy to 6,500 employees in three continents and 15,000 orders for the ES8, secured with a $770 deposit.

Most of those employees are housed in the technology park here that is home to Nio’s headquarters.

There, a work force that averages about half of his age comes to grips with the rock classics lead guitarist Cheng and his bandmates pound out during Friday afternoon practices in what Cheng calls his “music room.”

“When I play Led Zeppelin and Deep Purple, these guys say, ‘What the hell is that?’ ” Cheng said.

Cheng spoke with Dave Versical, director of editorial operations for Automotive News Group, on the following topics.

EVs replacing internal combustion engines:

It’s going to happen, and it will be sooner than you expect it, including autonomous drive.

China’s EV mandate, which starts to phase in next year:

Our projection is most of the big guys will have to find a partner to try to resolve the issue — like Volkswagen with [our manufacturing partner] JAC — everybody has to find their Chinese JV partner to give them a foreign-badged local vehicle.

Nio’s business model:

Our business model is to service the user, so it’s a different ballgame. It’s a user enterprise — basically, do away with the dealership and remain in direct contact with the customer.

We’re trying to be more than just a car company, because with a car company, you can be bonded into a conventional mindset.

Photo credit: BLOOMBERG

Nio’s headquarters in the Shanghai International Automobile City industrial zone:

The Shanghai government was very keen to build this as an auto city. They started out with a Formula 1 track. There’s a lot of manufacturers and suppliers based here. Shanghai Volkswagen is just about 1 kilometer away.

There’s also kind of an Mcity, [the proving ground in Ann Arbor, Mich.,] here for autonomous driving. There’s also [German suppliers] Schaeffler and Thyssenkrupp because of Volkswagen’s presence.

But they really wanted to build an auto city with the new generation of initiatives, including EVs. So this compound, when we started three years ago, was built by the government. We house about 4,000 people. The enterprise was set up to focus on a vital field: r&d.

The design of the ES8 and hiring BMW designers in Munich:

You may say the design of the car is very BMW, but it doesn’t matter. It’s how we want the car to be — we want it to be a traditional SUV, but then we will inject a lot of software humanity into the vehicle. We will be able to service the user-enterprise purpose.

The reasons for selling a seven- seat SUV:

Because nobody’s there, and you’re half the price of an imported Tesla, and you got all the good user experience and the best specifications, fully loaded, selling at $70,000 before incentives. Nobody can hit it and still make money. That’s the key.

The ES8 buyers’ color choices:

I thought the Chinese would be conservative with black and white, but now 40 percent go to sky blue.

Nio’s logo:

We want to create a joyful lifestyle, and the vision is, the blue sky is coming. The logo itself was picked from 1,500 designs. We finally decided we want to do a flat logo with a round shape. When you look at the Earth from outer space, that’s the sky on the top and avenues on the bottom. So we have a blue sky vision on the top, and then we have action, a grounded everything for making that work. That’s the meaning of the logo. And, by the way, the logo is a round shape — making money, that’s important.

Nio’s Formula E racing initiative:

It will give you a good reading on the transmitting for strong Wi-Fi capability. In racing, there’s no more traditional transmission of information and data. We get a good reading of the racing conditions for our r&d use.

Battery-swapping stations:

We will be doing 42 cities this year. We are going to expand our service points to 340.

Suppliers:

The key is talk to your supplier as a partner rather than just killing them by negotiation and suppressing the price.

The plan for U.S. sales:

I think we need to put the plan for China first, and maybe two to three years later, we’ll get the updated version. The Chinese vehicle concept and the U.S. vehicle concept could be a little bit different. Maybe we need to launch a crossover first in the U.S. I’m not going to compete with a big pickup truck. I’m not good at doing that.


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