How Tesla gambled away from its competitor Nio

How Tesla gambled away from its competitor Nio

Tesla has long been a company that drove the automotive industry forward with its innovations. Now Musk’s company itself has its followers breathing down its neck.

Tesla is an important source of money for Elon Musk. But for how long?
Getty Images / Carina Johansen

Since the car industry has realized that the internal combustion engine is obsolete, it has been looking for alternatives. With Volkswagen, BMW, Daimler and many others completely missing out, interest turned to American manufacturer Tesla. Its boss Elon Musk realized early on that two things are changing dramatically in the world of cars. On one side the car, on the other side Digitization of the car. Musk pushed for both, particularly using autonomous driving as a major selling point for his cars.

Success proved him right. Tesla now sells nearly a million electric cars a year, making it the most successful manufacturer based solely on electric drives. But the old saying “Revolution eats its children” also applies to Tesla. Even if the American manufacturer continues to experience a wave of success, it is not alone in the market. But Elon Musk should not be worried about the rising tide of electric cars from established manufacturers. It’s manufacturers like Nio who may be the most dangerous for the top dogs from California.

A new sales model

Nio is the founder of tech billionaire William Li, who previously made his fortune from car comparison website Bitauto. Founded in 2014, Li Nio has grown from an idea to a car manufacturer with over 250,000 customers in just eight years. Similar to Tesla, the company has rethought the development of the car. Digital content and services come first, followed by an electric engine and a new sales model.

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Nio is attacking Tesla with innovation in two areas in particular: autonomous driving and batteries. When it comes to autonomous driving, there are competing philosophies. While Elon Musk believes that laser-based lidar sensors are obsolete, Nio relies on battery-based lidar and radar sensors. At the same time Accidents are increasing Tesla, while Musk says that an update to fully autonomous driving is coming soon. The company doesn’t even have approval for “Level 3” semi-autonomous trips.

The cameras and sensors used by Nio are better than those used by Tesla. While the American manufacturer can detect cars up to a distance of 229 meters, Nio manages 687 meters. For humans it is 74 meters for Tesla and 223 meters for Nio. The Chinese manufacturer has already beaten American competition here. Unlike all other manufacturers, Nio installs the sensors on the roof instead of behind the bumper, which allows the cameras and sensors to look better.

Changing the battery instead of charging for a long time

The Nio also has its own battery concept and charging infrastructure: the manufacturer relies on replacing batteries rather than simply charging them. The idea is that you drive your car to a replacement station and the battery is fully charged and replaced there in five minutes. Thus, annoying loading is completely removed. Nio also offers different battery sizes when swapping.

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The construction of the battery frame is designed to accommodate different amounts of battery cells. When exchanging, you can choose a battery with 75 kWh or 100 kWh. In the future, some models will also be offered with a solid-state battery with an output of 150 kWh, which should enable a range of 1,000 km. However, this gives customers a lot of flexibility. 75 kWh is enough for the city and trips, the big battery is intended for long distances.

The system developed by Nio itself has proven itself at least in China, where there are already more than 1,100 exchange centers that, according to the manufacturer, have made more than 13 million battery changes. In Europe, where Nio has just announced its market entry, there are only three stations. However, the company is also planning a nationwide expansion here once the sales figures are stable.

Tesla offers no such innovation and has nothing comparable in the pipeline. Instead, there are only known advertisements in the field of autonomous driving. When it comes to cars, Tesla also faces a problem, only two cars for sale available: the smallest variant of the Model 3 and the mini-SUV Model Y. While other manufacturers are expanding their portfolio, Tesla will not launch any new models in the future. If you take everything together, it seems that Tesla will soon fall behind in the arms race in the new world of cars.

Don Dahlmann has been a journalist for over 25 years and has been in the automotive industry for over ten years. Every Monday you can read his “Torque” column here, which takes a critical look at the mobility industry.