Nio, the Chinese company, aims to conquer Europe: the final gamble before death

Unknown to the general public in Europe, Nio wants to appear as a Chinese giant, but its performance makes people smile.

The year 2025 will be that of the cleansing of Chinese manufacturers, this is a guarantee. Failures are multiplying on the other side of the Great Wall, as the imperialist government is reducing its enormous public aid programs. Electric vehicles were at the heart of China’s industrial strategy to conquer the world, but after subsidizing all manufacturers, the Middle Kingdom is now hitting the brakes.

The billions of dollars spent have certainly allowed the creation of a global giant, BYD, but that’s about it. The United States and Europe have erected trade barriers to slow down the flood, and it works. Imported car sales from China plummeted in 2024… but this also led to a decline in European car sales in China. Volkswagen, Mercedes, Porsche, Audi, the Germans are taking a big hit and will need to rethink their strategy. But so what.

Nio firefly 2 — Nio Firefly aims to compete with the Renault R5 and R4 soon in Europe. @Nio

Temporary failure of Chinese cars?

The primary argument for Chinese cars is obviously their price, but the fiscal toll at the entry point to Europe has diminished this appeal. Additionally, the total lack of recognition does not reassure buyers or renters, but this phenomenon will quickly fade. We’ve already seen this with smartphones 15 years ago, and Chinese copies quickly took over the market from Apple. The same will happen with electric cars, even if employment in Europe should reduce the penetration mechanism’s reproduction.

The most illustrative example could be Nio, this “micro” manufacturer that presents itself as the Chinese Tesla. BYD can more claim this title. Nio was founded in 2014 by William Li, so 10 years ago, and its name means “bright future.” We challenge you to doubt that.

In 2023, only 160,038 cars were produced by Nio, making it a small industrial dwarf far from the noise created online to appear bigger than it is. Admittedly, the ambitions are there, but the financial challenges are enormous for launching a brand. The second death of Fisker serves as a reminder. Less than 200,000 cars sold worldwide, especially in a vast territory like China, is a glass ceiling that’s hard to break.

NIO Onvo L60 — Nio’s design is appealing, but this is only a small part of the challenge of selling cars to customers. @Nio

Fighting for survival

To expand, Nio is increasingly betting on affordable products, thus at the lower end and with more questionable reliability. In 2024, Nio launched the Onvo brand and the L60 model, a sort of Tesla Model Y that’s 12% cheaper (and with a nearly copied interior). Since then, Tesla’s sales in China have never been so strong… Since then, the expected sales volume has dropped to 20,000 units annually. Should we be worried?

Loss-making since its inception, despite billions of yuan in subsidies from the Chinese government, Nio aims for breakeven by 2026. Unless the great leader, Xi Jinping, unplugs the subsidies by then, as has already happened with several Chinese manufacturers in 2024. At its peak in 2021, Nio stock was valued at $61.95. Today, at the end of December 2024, it’s only $4.54, a collapse revealing its deadly trajectory…

Nio is definitely betting its survival on 2025, and it’s hard to see how it could finance its European expansion, which would require billions of euros in investment for a potentially profitable return years down the line.