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The Edge Elon Musk's China Nemesis Survived Once, but He Has A

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The Edge Elon Musk's China Nemesis Survived Once, but He Has A The Edge Section: World Ad Value: RM 34,732 14-Jun-2021 Size : 1,872cm2 PR Value: RM 104,197 Elon Musk's China nemesis survived once, but he has a fight ahead Elon Musk's China nemesis survived once, but he has a fight ahead BY BLOOMBERG NEWS \ A / illiaiii Li is being mobbed. At a I / gala dinner in Shanghai, the \ I \ I founder of Chinese electric car 1 / 、/ maker Nio Inc can barely move V V forward in the buffet queue be­ fore being stopped for another selfie, hand­ shake or hug. Swapping his usual attire of jeans andT-shiit for a tailored grey suit and blue dress shirt, the tall 46-yeai-old happily A - obliges with a smile. Li manages to spoon a small amount of fried rice and vegetables onto his plate, but he's not here for the food. Over the next three hours, he poses for hundreds more photos, chatting with customers of the auto maker he started just over six years ago and has built into a way of life — at least for the people who buy his cars - with clubhouses, a round-the-clock battery recharging service and even cloth­ ing, food and exercise equipment, all decked out in Nio's geometric logo. As Li works the room, a video backdrop shows six performers, each wearing a different-coloured Nio hoodie, singing a self-composed song dedicated to the company. "Meeting with Nio, we want to be Li having a selfie taken with a fan at a gala dinner in Shanghai better selves," the not-so-catchy ditty goes. While other billionaire executives may cringe at spending their down time glad-hand­ business, but with Nio, Li has sought to create ing customers, for Li this is core. Nio's business Powering Ahead a brand beyond the vehicles,an approach he model relies on creating a sense of allegiance China's electric-vehicle sales are forecast to top 6 million by 2025 describes as “the pursuit of being a user-en­ among buyers, who then persuade friends ■ Battery electric ■ Plug-in hybrid terprise'^ The most visible manifestation of and family to spread the word about its cars. 8M that was the Nio House,an elite drop-in centre Dubbed "Rippling Mode”, the strategy invokes for the company's customers — even offer­ the ever-widening circles caused by throwing ing ai t and music classes for their children a single stone into a pond,he sa旳The scene 6 —and located on prime real estate in some in Shanghai was just what he was aiming of China's biggest cities. It was coupled with for — a passionate customer base with the 4 extravagant marketing events.The car maker loyalty of Apple Inc fans, and a dash of Elon holds annual Nio Days, and at the first in 2017 Musk cult-of-personality thrown in. paid for flights and luxury hotels for everyone It is an approach that has turned Nio into who ordered a vehicle a year before production Musk's most visible nemesis in a country that started. R&B star Bruno Mars headlined the seems to be minting Tesla adversaries every 2018 event. When its public charging faciEties other day. While other electric vehicle (EV) are overwhelmed, Nio has a fleet of cars that companies may pump out more cars aimed can take portable battery chargers to users at the mass market, Nio is targeting the pre­ wherever they're parked. Source： BloombergNEF Bloomberg mium buyers that Musk — who established Such largesse, along with a major recall his first Gigafactory outside the US on the after some cars caught fire just as China shift­ outskirts of Shanghai in 2019 — needs to re­ ed subsidies from EV purchases to support alise his ambitions for global growth and of them SU\ft,inthe first quarter at an average battery-powered passenger vehicles jumped the charging network, saw Nio rack up US$5 long-term profitability; China is ground zero price of US$68,000 (RM279,479) while Tesla 10% to 1.11 million last year, despite the hit billion of losses in its first four years of exist­ in the transition away from gas guzzlers to shipped around 1^000 of its Model Y SUV in from the pandemic-one that will challenge ence (Tesla took about 15 years to reach that alternative-energy cars,with the government China,which starts at around US$53,000. Nio's both Nio and Tesla,and set the stage for global particular milestone). By the second quarter intent on dominating a new automotive era share of the overall China market for high­ control over the future of cars. of 2019, the company was losing around US$5 that has triggered an onslaught of investment er-end cars is second only to Tesla, according After years watching from the sidelines, milEon a day. over the past six months and that even the to Kang Jun, an analyst at consultancy LMC the auto-making giants are doubling down “It was our darkest time,“ said Li. A team US is now embracing. Automotive, and it has set a “benchmark” for on EVs, with Volkswagen AG launching an met nightly to comb through expenses, from The biggest car market on the planet, Chi­ the wider EV space, "particularly in product eight-car range from its platform designed salaries to tiie cost of Nio Houses. "It was easy na is already the world's largest for EW. Sales and service innovation". for battery electric cars in China,Toyota Mo­ to calculate how much we could earn from will reach two million this year and surge to Tesla has also faced a raft of setbacks of tor Corp unveiling a new EV platform and selling cars, but we had to mind everything 6.2 million vehicles by 2025, when they will late in China,w hich accounted for more than premium car makers such as BMW AG aim­ to sustain a normal operation/ he said. "Every account for a quarter of all passenger car sales 20% of all revenue last year. Increased scrutiny ing for one-quarter of all Chinese sales to be dollar counted." in the country, according to BloombergNEE from local regulators has been accompanied electric.At the same time, Big Tech is eyeing By October 2019, it looked like the gig was Urbane, early adopters in China's biggest by a rising backlash againstTesla and its cars, the sector, lured by the technological possibil­ up.A fter posting a worse-than- expected quar­ cities have been at the heart of that transition, culminating in one owner climbing on top of ities. Chinese search-engine titan Baidu Inc, terly loss, Nio's shares plunged to a record low and are prime targets for both Nio and Tesla. a Model 3 at the recent Shanghai Auto Sho\% smartphone maker Xiaomi Coip and network of US$1.32.At its nad%the car maker had lost Nio's premium ES6 SUV competes head to claiming the company had failed to address giant Huawei Technologies Co have pledged more than 70% of its market capitalisation — head with the sporty Model Y thatTesla started issues with her vehicle's brakes.The protest, almost US$19 billion to the EV and autonomous about US$5 billion in value — from its New making in China last year.lt is a tussle that is which went viral in China,unleashed a wave driving space since the start of the year alone. York initial public offering a year earlier. front and centre for Li, who in an interview of complaints aboutTesla's customer service, Smaller companies like Nio—vrfiich is list­ Even a US$200 miDion cash injection from with Bloomberg talked about how the eldest the very thing Li — who regularly replies to ed with compatriots Xpe喀 Inc and Li Auto Inc a sale of convertible notes to Li and an affil­ of his two sons, a first grader, wants to follow queries from Nio owners on the company's in New Vbrk,putting them on the radar screen iate of Chinese tech giant Tencent Holdings in his footsteps. app and has taken weekend trips across China of US investors — will face greater pressure Ltd - an early investor in both Nio and Tesla “One da^he told me that he would study to meet customers—has used to differentiate as multinationals enter the fray, said Zhang —wasn't enough to shore up the company's hard and work hard, helping dad beat Tesla Nio in the cutthroat EV landscape. Xiang, an auto-industry researcher at North seemingly insatiable need for cash. when he grows up," said Li. "It's going to be China University of Technology in Beijing. The setbaclcs kept coming. Nio couldn't af­ too late, I said." Battle Royale brewing "It is by no means atime they can rest easy;" ford the hnal payment on an imported stamp­ These days, that prospect is looking less But Tesla isn't the only foe he has to worry Nio has already had one near-death ing presser, a large machine used to shape a like wishful thinking. about. A Battle Royale is brewing in China's experience. car's panels.Worse, it had to sell the presser at Nio delivered more than 20,000 vehicles,all new energy car market — where retail sales of Car making is typically a capital-intensive a discount to Tesla, which promptly installed The Edge Section: World Ad Value: RM 34,732 14-Jun-2021 Size : 1,872cm2 PR Value: RM 104,197 Elon Musk's China nemesis survived once, but he has a fight ahead (cont) it in its new Shanghai plant, built with loans greatest success, howevei; with the three listed and support facilitated by the government.
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