NIO, the long-shot EV startup that likes its chances

Michael Dunne is president of Dunne Automotive, a Hong Kong investment advisory firm, and a contributor to Automotive News China.

You have to love an entrepreneur who puts his venture’s chances of success at a piddling 5 percent and wins over powerful people to his vision anyway.

Meet William Li, the 43-year-old chairman of NIO, the newest premium electric vehicle brand on the block.

He came up with the idea to build a high-performance electric car at the 2014 Paris auto show where he met — and quickly befriended — Martin Leach, former president of Ford of Europe.

Li had made his fortune as founder of Bitauto, a Chinese automotive Internet services company listed on Nasdaq.

Li: Taking it “one step at a time”

Li and Leach saw an opportunity to create a Tesla-type vehicle for China. They sketched ambitious plans to launch a global startup with manufacturing in Shanghai, r&d in Silicon Valley, engineering in Munich and design in London.

Those plans have begun to bear fruit. This month, NIO launched sales of its first product — an all-electric seven-seat SUV — in Beijing.

After he incorporated NIO in 2015, Li persuaded Tencent, China’s most valuable company, to invest hundreds of millions of dollars. Venture capital titans Sequoia Capital China and Hillhouse Capital came aboard, too.

{{title}}

{{abstract}}
Read more >

{{/content}}

That same year, Li and Leach also persuaded the highly regarded Padmasree Warrior to leave Cisco and lead NIO’s technology team.

The India-born, Cornell-educated Warrior was named CEO of NIO USA, where she directs 460 employees in San Jose, Calif., on autonomous drive systems and connectivity.

People who have met Warrior say she is an intriguing blend of refinement, smarts and blunt talk. “Our goal is to build a robot that looks like a car,” she told Bloomberg last year.

The company’s first mass-market product is the ES8, a seven-seat SUV with plenty of performance chops. Think Tesla Model X without the flappy wings.

The aim is to take a chunk of China’s massive luxury segment, which at an estimated 2.3 million vehicles in 2017 is larger than the U.S. luxury market.

Now let’s acknowledge the skeptics. Can a car company really go from zilch to product launch in less than one presidential term? Doubters are right to ask questions, but NIO has answers:

  • Manufacturing? NIO struck a deal with Jianghuai Automobile Co., Volkswagen’s EV partner in China, to assemble the vehicles.
  • Battery charging? NIO promises to offer swappable batteries, a creative fix to the inconveniences of charging in Chinese cities where most people live in high-rise apartments.
  • Capital? Funding has grown steadily to $2.2 billion.

This doesn’t eliminate all uncertainties, of course. Will brand-infatuated Chinese embrace NIO, a newbie without a deep heritage such as that of Mercedes?

The ES8, NIO’s all-electric SUV

What about build quality? Will the Chinese-built battery deliver adequate range and reliability? And will NIO overcome the loss of Leach, who succumbed to cancer last year?

We will not have to wait long to find out. Now that the ES8 is on sale in China, NIO plans its U.S. launch in 2020.

Li acknowledges the long odds, but remains undeterred. “We have a probability of success of only 5 percent,” Li said at an industry conference in early 2016, “but I am willing to take one step at a time to increase that rate.”

Winning ways often begin with a confident demeanor. NIO has hired the British band Imagine Dragons to open the ES8 launch party in Beijing with its hit single “Thunder!”

Five percent odds be damned.