China Challenging Tesla With Car Half The Price Of Model X
While electric automaker Tesla struggles to reach profitability, its competitors are slowly beginning to chip away at its market share. Recently, Chinese electric vehicle start-up Nio has launched the NIO ES8, a seven-seater electric SUV meant to challenge the Tesla Model X at half the price.
Founded in 2014, the startup unveiled the ES8 in Beijing on Saturday at a base price of 448,000 yuan ($68,947). This is half the price for the Model X, which starts at 836,000 yuan ($128,660) after import duties in China.
Featuring an all-aluminum chassis, the vehicle boasts a range of 500 kilometers (310 miles) on a single charge and able to accelerate to 100 kilometers per hour in 4.4 seconds. It also comes equipped with the Nio Pilot, a driver-assistance system as well as an in-car artificial intelligence or AI system called NOMI that can help regulate the temperature and play music based on voice requests.
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Nio is offering also offering a battery rental plan is available to ES8 customers, with a rental subscription of 1,280 yuan ($193) per month. The vehicle is also customized and made-to-order with interested buyers able to place an order through the Nio App.
Despite their new vehicle competing with Tesla, Nio's founder maintains that they are unlikely to affect the company's sales in China.
"It's hard to assume" that this will affect Tesla's sales in China, NIO founder William Li tells CNBC. "Maybe Tesla will sell less...after our product is out. Or probably, because the whole market is growing, they will still maintain growth in sales. It's hard to say."
A few months ago, China announced that it would slowly step away from conventional-powered vehicles in favor of cleaner, more sustainable electric ones, and they're willing to pay for it. The country has been offering subsidies as significant as $15,000 per vehicle making it a veritable wellspring of profit for electric automakers.
Tesla plans to be the king of the budding Chinese electric vehicle market and has already begun investing heavily in electric vehicle infrastructure in the country. The company recently unveiling the world's largest supercharger station in Shanghai while also striking a deal with the city's government to build a new gigafactory.
It was recently revealed that the Elon Musk-led venture is already gearing up production for its Model 3 mass-market model, the vehicle that's expected to bring it to profitability. While its Model X and Model S variants have been able to bring in some semblance of revenue to the automaker, it's massive burnout rate continues to leave it teetering on the edge of financial oblivion.
Tesla has built a massive lead over its competitors thanks to cutting edge technology. However, this lead has largely been erased without the company achieving financial viability. With more and more players entering the market, the company needs to realize its promises quick or be driven out of the market entirely, no pun intended.
