International car brands, already experiencing a sharp sales decline, have one more thing to worry about as Chinese electric vehicle (EV) maker Nio began sales of a new luxury sedan to challenge the likes of BMW’s 7 series and Audi’s A8.
The fully electric ET9 executive sedan, which the company expects to begin delivering in March, will spearhead a move among Chinese EV makers to break the dominance of conventional petroleum-powered luxury vehicles built by foreign rivals, said William Li, CEO of the Shanghai-based company.
“I feel safe to say that foreign car brands will continue to lose their market share [in China],” he said at a briefing on Thursday. “They will be further marginalised in this market, where indigenous carmakers are showing an upper hand in developing and manufacturing electric cars.”
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The ET9, priced at 800,000 yuan (US$110,080) in presale, is fitted with high-performance computing power and what Nio said is the world’s first fully active integrated hydraulic suspension system, which promises to offer a smooth and comfortable ride even on bumpy roads.
The car will be powered by a 120 kilowatt-hour (kWh) battery pack with an energy density of 292kWh per kilogram, compared with the average EV battery’s 200kWh per kilogram. Higher energy density means greater driving range for an equivalent weight of battery.
Nio said it will unveil final retail prices for the ET9 variants later this month. The car was first announced nearly a year ago.
BMW’s internal combustion engine-based 7 series cars start from 919,900 yuan in the mainland market, while the basic edition of Audi’s A8, also petrol-powered, sells for 789,800 yuan.
Nio aims to sell 1,000 ET9s per month, which would be on par with deliveries by the global giants, Li said, adding that the car is the most expensive model Nio has developed since it was established in 2014.
Nio CEO William Li stands next to ET7 model during an interview at the Beijing Auto Show in Beijing on April 25, 2024. Photo: AFP alt=Nio CEO William Li stands next to ET7 model during an interview at the Beijing Auto Show in Beijing on April 25, 2024. Photo: AFP>
Foreign brands dominated the Chinese automotive market in the first two decades of the century, but now hold around a 40 per cent share of the market, down from 63 per cent in 2015, according to the China Passenger Car Association (CPCA).
International carmakers such as Volkswagen and General Motors have been eclipsed by their Chinese rivals, from BYD, the world’s largest EV maker, to Geely, owner of Volvo Cars, because of their slow transition to electric cars.
EVs have accounted for more than half of new-car sales on the mainland each month since July.
Foreign carmakers stand to lose up to US$20 billion a year in profits in China, UBS said last month. But the Swiss bank also predicted that they would maintain their branding and production advantages in the premium segment, where wealthy customers are more willing to pay a lofty price for a luxury car powered by an internal combustion engine.
“As Nio launches an attack on the international luxury carmakers with new electric models, it is certain that other Chinese companies will develop expensive models soon, to siphon off buying interest in BMW and Mercedes,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “It remains to be seen whether the new models can convince consumers of their performance and style.”
According to the CPCA, sales of premium cars – powered by either electricity or petroleum – accounted for 13.6 per cent of the national total, or 3.47 million units, last year.
About 27 per cent of those, or 936,900 vehicles, were battery-powered cars, with most of the remaining cars assembled by foreign companies.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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