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Nio is changing its global strategy with U.S., EU tariffs on the horizon

Nio unveils affordable electric vehicle

Ai Tiecheng, Senior Vice President of NIO and President of ONVO, speaks during the press conference of ONVO, NIO’s new subsidiary brand, on May 15, 2024 in Shanghai, China. NIO launches its second brand ONVO and its first model L60 on May 15.

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SHANGHAI — Chinese electric car startup Nio is adjusting its approach to global markets in light of geopolitical developments, CEO William Li told reporters Thursday.

The company will still focus on China, and will persist in its initial aspiration to be a global company — “but our approach will have some change,” Li said in Mandarin, translated by CNBC.

Nio launched its lower-priced brand Onvo on Wednesday with a new L60 SUV that’s about $4,000 cheaper than Tesla’s Model Y.

“For example, in Europe we previously used a direct sales method,” said Li, who founded Nio about 10 years ago.

“But now we have Onvo and then we will have Firefly, an even lower [price] entry-level brand. We can enter the global market, and in the process of doing so we will have some changes. We can look more for local partners.”

That can include local distribution or production, Li said, describing the strategy overall as “global capability, local operation.”

The company had initially focused on the premium end of the market and has started sales in parts of Europe.

State-owned automaker GAC’s international department told CNBC last month that its push overseas would also incorporate a more flexible approach, partnering with local factories in some markets or investing directly.

BYD has relied on local distributors for its overseas expansion, while building factories in certain markets.

Li has not specified when Onvo-branded cars would begin sales outside China.

The Biden administration this week announced tariffs of 100% on imports of Chinese electric cars, while the European Union is mulling similar measures. It comes amid growing U.S.-China tensions that have recently focused on advanced semiconductors.

Li reiterated his view that the U.S. tariffs are “unreasonable” especially given the impact to consumers and climate goals.

He described Chinese tariffs on car imports as “reasonable,” and said Nio has called on the Chinese government to eliminate tariffs on imports of new energy vehicles. The category includes hybrid and battery-only powered cars.

Intense competition in China

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