Author: Nie Yiyao
“China and Europe lead the global electric vehicle market, while Norway leads Europe,” which is a consensus in the electric vehicle industry worldwide.
On May 6th, NIO released its Norway strategy, officially entering the Norwegian market. In NIO’s layout, Norway is the pivot of its European strategy and the beginning of its global strategy.
Why Norway?
As China and Europe have resolute attitudes towards promoting car electrification and have both set long-term, clear goals, both markets have become a must-try terrain for electric vehicle brands.
In Europe, Norway seems to have a more aggressive attitude towards electric vehicles replacing fossil fuel cars. The government heavily subsidizes electric vehicles and exempts them from taxes, while imposing high taxes and oil prices on fuel cars.
This measure has made Norway the first country in the electric vehicle market share to exceed 50%. In 2020, Norway sold a total of 141,412 new cars, of which 76,789 were pure electric vehicles, accounting for 54.3% of the electric vehicle sales. By the first quarter of 2021, the pure electric vehicle market share in Norway has climbed to 57%, and this number is still continuing to rise.
Norway also has significant advantages in the use of electric vehicles. Specifically, Norway’s charging facilities are widely distributed across main roads, supermarkets, restaurants and public parking lots in cities, and Norwegians have a shorter daily commute, which makes up for the shortcomings of electric vehicle range. Under the strong push of the government, electric vehicles have been widely accepted in Norway, with the market share increasing from 1% to over 50% in just ten years.
What makes global electric vehicle brands even more excited is that Norway does not produce cars domestically, so all cars rely on supplies from other countries, making it a battleground for electric vehicle brands.
In addition, Norway, located in northern Europe, is different from southern European countries that prefer small cars, where Norwegians show more preference for large pure electric vehicles. In 2020, the best-selling pure electric vehicle in Norway was the 4.9-meter Audi e-tron. In April 2021, the Volkswagen ID.4 rose strongly and surpassed the Tesla Model 3 to become the local sales champion.
For NIO, a high-end electric vehicle brand, besides competing with international brands in the domestic market, proactive international expansion and competing with international brands worldwide has become a pressing opportunity and historical mission. Norway is the best route to Europe.
NIO’s “Long-termism” Strategy
According to NIO’s Norwegian strategy, several key pieces of information are:
- The first model, the new ES8 intelligent flagship SUV, will begin delivery in Norway in September this year. The second model, the ET7 intelligent flagship sedan, is scheduled to enter the Norwegian market officially next year.Using high-end products to enter the Norwegian market is highly related to the user habits of the Norwegian market, and two products with obvious advantages will help NIO open the market.
After the two high-end car models are launched in the Norwegian market, NIO will gradually introduce other car models locally to improve the product lineup.
Secondly, NIO will establish a direct sales and service network in Norway.
NIO’s first NIO House outside of China is located on Karl Johans Gate, the commercial and cultural center of Oslo, the capital of Norway. It covers an area of 2150 square meters and is only 700 meters away from the Norwegian Royal Palace. Currently under renovation, it is scheduled to open in the third quarter of this year. Its geographical location is extremely superior, similar to NIO’s first NIO House, Beijing Oriental Plaza Store, in China.
In 2022, NIO will also build four NIO Spaces in Bergen, Stavanger, Trondheim, and Kristiansand, Norway.
In September of this year, when the brand new ES8 is delivered, NIO’s first service and delivery center in Norway will also open in Oslo, providing local users with mobile service vehicles, door-to-door vehicle pickup and other services. Next year, NIO’s after-sales service will cover the whole of Norway.
Thirdly, NIO will build its own battery swap station in Norway in order to build a complete power supply system locally.
NIO’s European version of the charging map and the first batch of four second-generation battery swap stations will be put into operation in Oslo this year. In addition to Oslo, there will be 16 battery swap stations in Bergen, Stavanger, Trondheim, and Kristiansand in Norway next year.
NIO’s initiative to build its own battery swap stations in Norway not only provides users with more convenient car-replenishing services but also can be understood as introducing battery rental services (BaaS) locally to achieve more competitive car purchase prices and usage costs.
In addition to building its own battery swap stations, NIO will also cooperate with local charging service provider Plugsurfing to provide access to public charging services covering the entire European region for local users.
Fourthly, the NIO App European version will be launched in the third quarter of this year, providing Norwegian and English language options.
In addition to supporting APP car reservations and user points systems, NIO Life will also meet Norwegian users soon. NIO Life’s Norwegian-themed product series developed in cooperation with local Norwegian artists Anette Moi and Sandra Blikas will be released synchronously in Norway and China.
Fifthly, NIO will build a local team in Norway and recruit a NIO Norway “customer advisory team”.Currently, NIO has established a local team of 15 people in Norway and plans to reach 50 people by the end of this year. NIO Norway’s “User Advisor Team” has also opened recruitment to provide suggestions for localization experience, service quality, charging network, and store experience. They aim to help NIO constantly improve its products and services in Norway.
From the above information, it is evident that NIO is working hard to transfer its successfully verified “Chinese model” to Norway, which is a complete operating system composed of cars, services, digitalization, and lifestyle, based on user thinking and innovative ideas.
Regarding sales expectations in the Norwegian market, NIO Founder, Chairman, and CEO William Li and NIO Co-Founder and President Qin Lihong have not set specific sales targets yet. Combining the “Twelve-Word Guideline” mentioned repeatedly by both, which are meticulous preparation, long-term planning, and patience, it is apparent that NIO has not positioned its goal of entering the Norwegian market as a one-shot success. Instead, they focus more on building and deepening local consumer car experience and lifestyle.
If the Norwegian strategy is ultimately successful, NIO can promote it to more European markets. NIO’s globalization strategy is essentially a long-term strategy. Perhaps that is different from the past overseas strategies of some Chinese brands, but for NIO, which is born global, it is easily understood.
What are NIO’s winning chances?
To answer this question, let’s take a look at the opportunities and challenges facing Chinese electric vehicle brands in Europe.
“Chinese electric cars enter Europe!” according to the German “Auto Zeitung,” Chinese automakers are advancing plans to expand to Europe and other regions worldwide.
In fact, this statement has evidence to support it. With the arrival of SAIC MG EZS, AIWAYS U5, BYD Electric Bus and Tang EV, and XPeng G3i in the European market, as well as NIO’s entry into Norway, there are more and more Chinese brands in the European EV market.
As expected, there will be more opportunities for Chinese EV brands to expand to Europe in the coming years. This is because, on the one hand, as European countries strengthen their ban on fossil fuel cars and increase subsidies for EVs, policy-driven efforts are pushing the European new energy car market towards rapid development.
In 2020, European new energy car sales reached 1.367 million units, surpassing China’s new energy passenger car sales of 1.246 million units in the same period, winning the global new energy sales championship for 2020.On the other hand, in terms of consumption, there is a general consensus that the policy-driven Chinese electric vehicle market, having upgraded its products and technology, is now ahead of the European market. In other words, the European market is transitioning from observation to active participation in the electric vehicle sector, while the Chinese electric vehicle market has already stepped into an industrial adjustment phase, where competition is the most intense.
Intense market competition has inspired Chinese electric vehicle manufacturers to surpass their European counterparts in terms of both appearance and design, and technological innovations such as battery efficiency and intelligent connectivity.
For the European market, which is just entering the period of growth explosion, Chinese electric vehicle brands have significant advantages that are distinctive from traditional fuel vehicles. Take Renault ZOE, a purely electric car that has been popular in the European market for years, as an example. Despite being launched in 2012 and still without a style update, this somewhat mediocre electric car has occupied the top spot on the sales chart for years.
Chinese electric vehicle brands can fully provide better products with more competitive advantages, both in performance and price, and are thus ideal for the European market.
Thirdly, the current tolerant attitude of the European market towards imported electric vehicles provides a rare opportunity for Chinese electric vehicle brands.
Europe is constantly strengthening its policies on new energy vehicles and setting the world’s most stringent carbon emission targets, which has prompted explosive growth in sales of electric vehicles. However, the electric vehicles produced by local manufacturers in Europe do not completely meet the demands of the local market.
Therefore, most European countries currently do not impose tariffs on imported electric vehicles. For other electric vehicle manufacturers outside of the European region, as long as their vehicles are certified, there are great opportunities for them to enter the market.
At the same time, Europe has not adopted any special policies to protect local manufacturers, and the brand and model structure of the market tends towards diversification. This is also advantageous for Chinese electric vehicle brands.
It should be noted that although Europe currently has a high degree of tolerance for imported electric vehicle brands, it is not ruled out that in the future, tariffs will become stricter in order to protect the interests of local manufacturers.Previously, Carlos Tavares, president of the European Automobile Manufacturers’ Association, stated that “in encouraging the consumption of new energy vehicles, we must also avoid putting European automobile manufacturers at a disadvantage in the fiercely competitive global market.”
As the European electric vehicle market continues to develop and mature, the biggest uncertainty for Chinese electric vehicle brands entering Europe in the future is trade barriers.
Returning to NIO’s prospects, the question is whether NIO can take root in Norway and then bloom throughout Europe.
NIO has all the opportunities that electric vehicle brands face in Europe: a rapidly growing market, sustained government subsidies, and high tolerance for foreign brands.
NIO also has its own advantages: innovative products, leading technology, and a strong user-focused mentality.
NIO also faces uncertain future challenges: trade barriers in the European market, and traditional European car brands launching counterattacks against new players.
It is too early to judge whether NIO’s European expansion will be successful, but from NIO’s Norway strategy, it is clear that all deployments are steadily heading towards success. When a company’s efforts are all aimed at achieving a successful goal, the chances of success increase.
NIO’s Norway strategy is clearly not just for selling cars. As Marius Hayler, NIO’s Norway General Manager, put it, “NIO is about to enter the Norwegian market, to create a pleasant way of life for Norwegian users, to build a community based on cars, and to share joy and grow together.”
NIO has successfully exported a business model, service system, and consumption awareness that are radically different from the era of fuel-powered cars in China. Now, they want to expand and promote it in Norway and even throughout Europe, and localize it as much as possible to gain hardcore fans as they did in China, and to obtain a “reserve zone” that truly belongs to NIO in the European market. This is also the best way to face strong competitors and avoid the adverse effects of possible future trade barriers by rooting the business in the local market.
Therefore, Li Bin and Qin Lihong can calmly state that they do not cling to short-term sales in the Norwegian market, but carefully plan for the long term and have patience. This is a determination and spirit that is reminiscent of “the road ahead is long and filled with obstacles, but step by step, we will surmount them.”
Indeed, NIO has experienced the test of life and death in the Chinese market and is now thriving. For a brand that has faced life and death, why not ask for success and rebirth in the future?
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.