Nio’s Firefly models will still be competitive in Europe even with the surcharge, says William Li

In the long term, if local sales reach a certain level, say 100,000 units, local production should take place, Nio CEO William Li said.

Nio (NYSE: NIO ) founder, chairman and CEO William Li expressed his opposition to additional tariffs imposed by the European Union on Chinese electric vehicles (EVs), while noting that the company’s future models under its own brand, however, the third, codenamed Firefly, will still be competitive in Europe.

“The EU initially imposed a 10 percent tariff on Chinese electric vehicles, and now an additional 21 percent has been added, raising it to 31 percent, which is definitely not fair,” Li said at a media event. users in Tianjin on June 19. in a video seen by CnEVPost.

Europe is a global model for clean energy and sustainability, but now imposing additional tariffs on Chinese electric vehicles is a logical conflict, he said.

Li also noted that the surcharges are not yet decided and a final decision will be announced by October or November.

The European Commission announced on June 12 that it will impose temporary additional tariffs on electric vehicles imported from China starting next month, varying by car manufacturer and reaching up to 38.1 percent.

Nio and a number of other Chinese battery electric vehicle (BEV) makers that cooperated with the investigation but were not sampled will pay a weighted average surcharge of 21 percent.

On the day the decision was announced, Nio said he strongly opposed the additional European tariffs and stressed that his commitment to Europe remained unchanged.

The additional tariffs will inevitably hit Chinese carmakers’ incentives to export electric vehicles to Europe, and for Nio, its Firefly sub-brand, which it had planned to launch in Europe first, will have to a new weight.

“We certainly don’t want to end up with so many surcharges, but if this is what is ultimately decided, then for Firefly, even with these surcharges, it will still be competitive in Europe,” Li said in the user communication yesterday. .

“Even if we get hit with so many tariffs, we still have a chance, we’re still competitive, but it’s certainly going to affect some sales and profits,” he said.

Li noted that in the long run, the internationalization of car companies will have to rely on localized operations.

“The initial volume may not be enough to support (localized operations), which would not be cost-effective, but if a certain volume is reached, say 100,000 units, local production should be done,” he said. he.

After reaching a certain local volume, Nio will actively consider local plans, “It’s something that needs to be done to go global,” Li said.

It’s like companies in Europe and the US would build factories in China if they thought the Chinese market was big enough, he added.

In January 2023, Nio co-founder and president Qin Lihong confirmed the existence of the new Firefly brand at a user event and said the brand was aimed at the small car market as well as the micro market.

The Firefly models will be priced from RMB 100,000 ($13,780) to RMB 200,000 and are expected to debut in the European market in the third quarter of 2024, Qin said at the time.

In an interview with local media earlier this year in May, Qin said that the products of the third brand were ready, but the launch of the new brand would be delayed until the second quarter of 2025, given the overall sequence of the brand .

Nio originally planned to launch the Firefly brand in Europe first, but has now changed its strategy and will accelerate the launch of the new brand and launch it in China first, according to a June 6 report by local media 21jingji.

The first Firefly model will make its debut in China, likely at the end of this year, before launching in Europe in the first half of next year, the report said, citing multiple sources.

According to the report, the sub-brand’s mobile app is expected to launch in December.

($1 = RMB 7.2605)

Nio changes strategy on third-brand Firefly, first model to debut in China instead of Europe, report says