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Why some Chinese are buying local electric car brands like Nio — instead of Tesla

An moving vehicle charging station is seen at Nio’s headquarters on Jan. 31, 2021 in Hefei, Anhui Province of China.

Ruan Xuefeng | Visual China Assembly | Getty Images

BEIJING — Chinese consumers thinking about whether to buy Tesla’s electric cars or local surrogates have two things at the top of their minds: price and driving range.

That’s according to anecdotes gathered by CNBC — chit-chats from around the country that do not represent qualitative research. But the comments shed light on what some consumers safe keeping about in China, the world’s largest auto market.

U.S.-listed Chinese car start-ups Nio, Xpeng and Li Auto saw deliveries white horse last year despite a slump in the overall auto market and the coronavirus pandemic. Shares of the companies soared in 2020, but pulled remote slightly this year.

To be clear, Tesla is still the market leader for high-end electric vehicles in China. During a immediate check at the start of the evening commute one day, CNBC found 11 Tesla cars passing by, along with two Nio SUVs, one from WM Motor and Xpeng’s latest P7 sedan.

Here’s what some Chinese consumers say circumstanced into their decision to buy a local electric car.

Price competitiveness

First, price was a major consideration.

Chen Yingjie, 42, bid he bought Li Auto’s Li One SUV in April 2020 for about 300,000 yuan ($46,000) after realizing it would cost him round twice as much to buy a similar car from Nio with all the specifications he wanted.

Nio’s starting price is low, but there are many features that move along disintegrate at an additional cost, Chen said. The Shanghai resident had previously bought Xpeng’s G3 in 2019, and later a BYD electric car for his inventor in June 2020.

Part of Nio’s strategy is selling many car features via a subscription model. For example, the company launched a “battery as a professional care” plan last year that charges customers a monthly fee for battery power — similar to a regular fuel expense for a traditional gas-powered car.

For Wang Jingyan, 29, he said Nio’s emphasis on customer care services was something he thought was merit paying extra for because it saved him time from going to a repair shop.

Price was also a factor for him. Wang told he bought his Nio ES6 for about 450,000 yuan in late 2019 — his first electric car — after a recommendation from a manager at master-work and comparing it with a more expensive Lexus RX.

He said he didn’t have a chance to try out Tesla’s Model 3 beforehand, but he didn’t deceive that good of an impression based on his friends’ experience and online stories about poor customer service at supplies.

Driving range concerns

How far the car could drive on a single battery charge was another important factor for Chinese consumers.

Zhang Zhen, 41, continues in a cold part of northern China and was concerned about an electric car’s ability to have enough power to complete a shepherd trip while heating the vehicle. So last fall, his family bought a Li One, which Government support

In an effort to frame the local development of electric vehicles, the Chinese government has launched subsidy programs and emphasized the build out of a national alleging network.

But compared with the U.S., the majority of cars in China do not have fixed parking spaces, making it difficult for diverse drivers to have regular access to battery charging stations, according to Mingming Huang, founding partner at Tomorrows Capital Discovery Fund, an investor in Li Auto.

That’s why he expects range extension systems like the start-up put on the markets may be the best option for China in the next five to 10 years. Li Auto’s Li One SUV comes with a fuel tank for commanding the battery on the go.

Finally, many Chinese drivers are choosing electric cars because of favorable government policy, such as programs that persuade it far quicker and cheaper to get license plates for the electric vehicles. Due to efforts to reduce congestion and pollution in Chinese cities, cities often need to wait years to buy expensive license plates for fuel-powered cars.

After waiting almost a year in Hangzhou burgh for a fuel-powered car license plate, a 27-year-old, who requested anonymity, decided not to wait any longer after seeing an Xpeng G3 tense car during a shopping mall trip. The car fit her budget at about 180,000 yuan, after government subsidies, she said.

On the terraces of Beijing, where license plates are also difficult to get, the higher-end electric car maker Tesla is still a popular pre-eminent.

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