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Volkswagen's EVs Taking Off, May Surpass NIO's Market Share Volkswagen's EVs Are Taking Off in China, May Soon Surpass NIO's Market Share On October 22, SAIC Volkswagen ID.3 was launched in the country at CNY 159,888 to CNY 173,888 per vehicle. Volkswagen China achieved a milestone of 10,000 EV sales in September 2021. We dissect Volkswagen's EV sales through three perspectives: product, production and marketing. A solid EV lineup, concrete production capacity and improved marketing have made VW one of the fastest legacy brands shifting to an EV company status. We expect VW to surpass NIO and Xpeng's market share very soon but remain shy of Tesla or BYD. The global chip shortage has hurt the auto industry, with companies at the risk of cutting more production. Electric vehicles built on more technology attributes that need more chips should have been hit badly. However, Volkswagen China delivered stellar EV sales in Q3, which grew from 3,415 units in June to 10,126 units in September, eclipsing NIO and Xpeng's growth rates in the same period. As an EV brand once underrated by some Chinese consumers, how did the company lift its sales so quickly? This article will rewind Volkswagen's EV story in China and give it an outlook. Entering the mainland market Before entering China, in 2020, Volkswagen Group sold 56,500 ID.3 in Europe during the final four months, which proved ID's strong product power. One year later, VW started to consider launching and manufacturing special ID models in China. According to an official announcement, Volkswagen Group (China) rolled out two new IDs based on MEB's innovative modular electric drive platform at the end of 2020, including pure electric models FAW-Volkswagen ID.4 CROZZ and SAIC Volkswagen ID.4 X. The two models are larger than ID.3 and tailored to Chinese consumers. They had started production in Foshan and Anting factories, and the products would be launched in early 2021. These two plants have a total annual production capacity of 600,000 vehicles. So, Volkswagen is one of the earliest legacy car makers that put EVs into production in the Chinese market. With a concrete production line, the company began to pre-order ID.4 in China at the beginning of 2021. Compared with Tesla, Xpeng and NIO's lineup, some argued ID series were uncompetitive for shorter driving ranges, lacking intelligent features. But VW China has refreshed people's minds with spectacular sales growth. In the beginning stage of selling, ID didn't perform well. The auto insurance data showed April saw 2,140 units sales of ID.4, which is tiny for the auto behemoth. Later on, VW adjusted its policy with the dealership network to stimulate them to sell more EVs, set a new team to deal with NEV sales and trained a special EV sales team to find the momentum. Another critical initiative Volkswagen made is an omnichannel selling strategy. ID models are sold in the existing 4S stores and shopping malls. The shopping mall stores are invested and built by existing dealers, and there is no directly operated shop of OEMs. The company learned new retailing strategies from Tesla and NIO's success using multi-channels to acquire traffic. Volkswagen is opening EV-only stores in more malls, namely through ID. Stores. There are dozens of stores in Shanghai. It is also expanding into other megacities. Following more ID models exhibited in shopping malls and 4S stores, ID saw a surprising increase in sales, which broke 10,000 monthly sales six months after delivery. By comparison, it cost NIO and Xpeng two years. Will VW keep growing sales fast in the future? We expect VW to acquire a larger market share in the following period. We judge the future delivery range of an NEV company from a perspective of the product, production capacity and marketing. ID models' product has won EU consumers' acceptance and should be accepted by the Chinese. The production capacity may be a problem, but Volkswagen has a one-million-global-EV-sales target this year, which was set when the firm was well aware of the supply issues. It ought to prioritize new energy vehicles production, and the inventory purchased at the end of 2020 can be used for some time. So, sales should continue to rise, but supply chain issues will impact capacity. Besides, the popularity of Volkswagen electric cars is increasing as more shops are built. By the end of this year, monthly sales are very likely to set a new record again. To discuss the sales 'ceiling' of ID, we have to benchmark it to the industry leaders such as Tesla and BYD. After one year of mass delivery in China, Tesla gained its EV market share between 10-15%. BYD is shifting towards a full-EV brand and takes around 20% of China's NEV market. We believe Volkswagen is far from catching up with these two companies for being a legacy player but can surpass NIO and Xpeng's respective market shares in a year based on recent sales momentum. In a nutshell VW's solid EV product, concrete production capacity and omnichannel sales system made it one of the fastest legacy brands to complete an 'EV shift.' The sales momentum hints its future delivery will keep jumping. Although we don't think the company will quickly transform into an EV leader like Tesla in the premium segment or BYD in the lower price bands, it is very likely to grow its market share to overtake NIO or Xpeng's in the short run. For the full article with the charts, please visit the original link.
OTC:VWAGYLong
by EqualOcean
NIO's Thirsty EVThe NIO ES8, introduced in Norway on September 30, recently underwent a 1000km test resulting in an average performance. The journey resulted in an 11hour, 25-minute journey. The car stopped to charge 5 times and sustained an average driving speed of 87.6km/h. This ES8 utilized a 100kwh lithium-ion battery and besides its high energy consumption, the car did not offer the fastest charging rates. Bjorn Nyland described the new vehicle as to the thirstiest electric car ever tested. During his 1000km challenge, the car consumed 318kwh. With a middle-of-the-pack performance for NIO's newest addition to its fleet, it will have to set itself apart with its looks, features, and safety. The car is described as very comfortable in terms of interior space, has big wheels which affect its performance and efficiency, and even includes an egg-shaped small AI personal assistant named Nomi which can take pictures for you or direct you to a charging station. While prices for its American rival start at USD 107,097.12 in the UK, the ES8 is on sale in its homeland at the equivalent of USD 70,711.56. NIO has already begun deliveries of the ES8 and plans to expand outside of China to Norway first and eventually Germany. The initial upfront cost may be enticing to consumers who seek cheaper alternatives to premier EV's, but the performance and electric consumption could be a hindrance in the long run to committed customers. The rival Tesla Model X Long Range completed Bjorn's challenge an hour faster. Aside from the ES8, the company could have at least two more new models to unveil to the public on December 18th at– ‘NIO Day’ – that will hopefully perform more competitively against rival EV subtypes while maintaining affordability.
NYSE:NIO
by EqualOcean
NIO: Target hit and Gap filled! What's next?Hello traders and investors! Let's see how NIO is doing today! It did exactly what we expected in our previous analysis, last week, and it hit our target. I explained the technical reasons that made me believe we would seek the gap at $ 40.59 in my previous analysis; the link to it is below, as usual. Now that we hit our target, NIO did what seems to be a Shooting Star candlestick pattern in the 1h chart, and this is a weakness sign. That’s ok, since we are in a bull trend, pullbacks are expected, and now is the best place for NIO to start a correction. As long as we don’t see a bearish structure, NIO will probably be fine. Now, let’s see the daily chart: In the daily chart, it feels like NIO deserves a pullback to the 21 ema again, and that would be just another opportunity to buy. Since it triggered the pivot point at $ 39.63, it has been doing very well, but nothing goes up in a straight line forever. Let’s see if NIO will confirm a top near this gap area. If you liked this analysis, remember to follow me to keep in touch with my daily updates on indices and stocks. Have a good day!
NYSE:NIO
by Nathan_The_Finance_Hydra
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