Chinese electric vehicle firm NIO officially launched in the German, Dutch, Danish and Swedish markets last week under a lease-only business model, meaning that customers would not be able to buy NIO cars and would instead have to select a subscription plan. However, firm founder William Li admitted on October 10 that the company had underestimated local consumers’ enthusiasm for buying NIO vehicles and said it will be possible to make vehicle purchases in the four countries.
“In the past two days, we’ve received lots of feedback from our users, mentioning they would like to have the buy option,” William Li wrote on the European version of the NIO App. “We start in these four countries with subscription so that the team can focus more on one business model at the beginning. This is also the most efficient approach for a new team entering a new market without compromising on the user experience. We are open to the buy option and will further prepare for it.”
NIO‘s three new models, the ET7, EL7 and ET5, are the first to enter the four European markets. Under a subscription approach, customers can choose models with different configurations and battery capacities according to their own needs. The lease period is as short as one month and as long as five years.
Specifically, there are two options: long-term subscription and short-term subscription. Users who choose long-term subscription can only choose one type of car with a subscription period of 12 to 60 months. They will enjoy a low and fixed subscription fee. If they do not terminate the subscription after the subscription expires, NIO will automatically renew it. Short-term subscribers will be able to cancel their monthly subscription at any time up to two weeks in advance, and will be able to change vehicles at will. The monthly subscription fee will decrease as the car ages.
During the subscription period, users will also have access to maintenance, battery swapping and full insurance services. Later, users will be provided with battery upgrade services. NIO will also provide free pick-up services for short-term subscribers when they need to change cars.
Subscription prices for NIO users in Europe range from €1,000 to €1,500 per month, depending on subscription method, model configuration, battery capacity and other factors. In addition, the subscription price of the same model in different markets will fluctuate slightly.
NIO‘s subscription price is relatively high. The 01 PHEV version of Geely-backed Lynk & Co, which has also been made available for rentals in the European market, costs around €550 a month.
In response to this, Li said in a media conference on October 8 that the subscription pricing mechanism is very complex, needing to take into account the vehicle, capital cost, service cost and other factors. The subscription price of NIO is based on the capital cost, service cost, vehicle cost, and the renewal rate.
NIO is also equipped with a relatively complete infrastructure and sales service network for the European market. So far, NIO has built 380,000 charging piles across Europe and has put the European version of the charging map into use. Its battery swapping station in Zusmarshausen, Germany, is operational, while another station in Berlin is nearing completion. It plans to have 1,000 battery swapping stations overseas by 2025, most of which will be in Europe.