News
Exclusive: How NIO plans to stay a step ahead of Tesla and German rivals in China
In a high-end shopping district in Shanghai, China sits one of the newest, premium electric vehicles in the market: the mid-sized, all-electric NIO ES6 sports utility vehicle.
Taking the spotlight inside an expansive showroom of curved glass windows, terrazzo floors, and light douglas fir wood walls, the NIO House retail gallery is as much a high-tech electronics store as it is an experience.
Five years ago, NIO didn’t even exist; it was merely an idea in tech-mogul William Li’s head. Li partnered up with Jack Cheng, a former Fiat and Ford Executive, and Lihong Qin, a former real estate executive, to form a next-generation automobile company. Since then, NIO has delivered over 15,000 vehicles, employs over 9,500 people, and built an extensive charging and battery swapping network, as the company looks to become the de-facto brand in the burgeoning electric mobility market.
NIO’s journey over the last five years hasn’t been comfortable, or cheap; the company has raised over $3.5B from investors, including a public offering on the New York Stock Exchange last year (NYSE: NIO). But the fact that the company is producing and delivering vehicles to consumers puts NIO in rare company. Aside from Tesla who spent nine years to bring their first mass production vehicle to the market, other electric vehicle companies, including Faraday Future, Lucid Motors, Canoo, and Byton have yet to deliver a vehicle to customers, let alone build a factory for car production.
While it’s become commonplace to hear NIO being referred to as “the Tesla of China” – both are publicly traded companies that design and manufacture premium electric vehicles – the differences far outweigh their similarities. Where Tesla seeks to streamline its retail presence, NIO is investing heavily into the buildout of designer showrooms and members-only clubs for vehicle owners. Tesla has focused exclusively on fast-charging solutions, yet NIO is placing a massive bet on battery swapping technology and a move-fast-at-lower-risk manufacturing strategy that puts the company a step ahead of the competition.
Manufacturing in China
Five and a half hours outside of Shanghai (two hours by bullet train) in Hefei, China, NIO is building thousands of electric vehicles in a state of the art factory. Spooling up production last April, it’s an understatement to say that NIO was new to the vehicle manufacturing business. While the company had spent years developing their electric platform and first SUV, the ES8, they lacked manufacturing expertise to bring it to market. Designing and building their own factory, costing billions and taking years, wasn’t an option. Instead, NIO partnered with the state-owned manufacturer, JAC Motors.
JAC and NIO were considered an odd couple when the two announced their partnership in April 2016; JAC more well-known for their low-cost vehicles, rather than their craftsmanship. Outside of their automotive manufacturing expertise, JAC holds a highly coveted license to manufacture cars in China. Such a permit and strong relationship with the government is attractive to NIO and other automakers, including VW who is considering purchasing a large chunk of JAC. “Last November, the Chinese government endorsed this type of joint-manufacturing structure. With that preferential policy in place, NIO can put more investment and focus into R&D and the development of our user network and services,” William Li, NIO’s CEO, told Teslarati.
To counter perceptions of low-quality, NIO decided to bring on their own manufacturing team, to ensure that the vehicles were not only as high-quality as the competition, but better.
Enter Feng Shen and Victor Gu, two former Volvo executives charged with setting up and running the 2.5M sqft NIO-JAC facility. While the two joined NIO at different times, Shen had previously recruited Gu to Join Volvo back in 2010. The two believe strongly in making high-quality vehicles, putting it at the top of their priorities. For example, NIO’s body scans over 1,000 different spots on each ES8 body.
“We put tremendous effort into controlling the quality of the vehicle,” Shen told Teslarati. “For example, every day we sample two vehicles, evaluating the quality of the vehicle through a custom quality audit.”
Inside the NIO factory is a combined workforce of 2270 NIO and JAC employees, working to produce both the ES8 and ES6. The ES6 is in test production and expected to be in customers hands in June. NIO’s facility features some of the most advanced robotics in the industry, with their all-aluminum body line achieving 97.5% automation. NIO claims the body line is the most advanced of its type in China. The facility is currently able to produce 100,000 vehicles per year but can be expanded to produce 150,000 units and beyond.
The expansive white floors in NIO’s factory and ceiling that’s outfitted with 512 massive skylights fill the facility with natural light. The factory uses geothermal energy for heating and cooling, while thousands of solar panels produce energy to minimize the facility’s carbon footprint. Outside the facility, NIO is in the process of installing basketball courts and a soccer field on the factory grounds for employees to enjoy.
Converting Metal into Cash
NIO has the capability to produce thousands of vehicles per month and has ample runway before reaching maximum production capacity. The company sells its vehicles direct-to-consumer, and its streamlined logistics allows the company to hold little inventory.
When NIO launched their three-row premium SUV, the ES8, last fall, demand seemed strong. Production was ramping up as the company worked to fulfill their order books, delivering over 3,000 vehicles per month in both November and December of 2018. Then came 2019, the company’s deliveries fell dramatically to a low of 811 vehicles in February. The company pointed to the overall tense economic climate in China, seasonality surrounding Chinese New Year, and dramatic cuts to electric vehicle subsidies in China.
Compared to their peers in the large and mid-size premium SUV segments, the vehicles are competitive. The ES8 starts at roughly $66,500 (without battery leasing), excluding subsidies and other EV incentives, which is significantly below competitors like the Volvo XC90 ($93,700). Additionally, the ES8 features fast acceleration, 0-60 mph in 4.4 seconds, and a technology-forward interior. The forthcoming ES6 is entering a much larger segment than its larger sibling and is priced 7-10% lower than its peers, by Teslarati’s estimates. While the recent sales drop spooked investors, sending the company’s stock down nearly 50% from recent highs, it’s unclear if reduced demand is a long-term issue.
Regardless of recent sales issues, NIO is plowing full steam ahead. The company has 35 NIO Houses and pop-up stores open throughout China. The stores are all exquisitely designed and are built for both potential customers and current owners. Potential customers can check out the vehicles, take test drives, and purchase NIO merchandise; current NIO owners can head upstairs to the owners-only club.
-
- NIO House (Hangzhau West Lake)
-
- NIO House, club area (Shanghai)
-
- NIO House (Hefei)
-
- NIO House (Hangzhou West Lake)
-
- NIO House Library (Beijing)
-
- NIO House (Hangzhou West Lake)
NIO’s clubs are focused on providing a “joyful lifestyle beyond the car.” Essentially, they are places where owners can hang out, enjoy a latte, read books, attend events, and socialize with other owners. NIO even creates a custom drink for each NIO House, allowing owners to try out new flavors at each location.
The company believes that private clubs add value to a customers lifestyle and introduce them to a luxury-focused lifestyle. While not all owners will use the clubs regularly, NIO estimates that their owners visit 1-2 times per month. While it’s too soon to conclude whether NIO’s expansive retail spaces and clubs drive sales, it would be mild to stay that the company is betting big on the strategy.
If clubs and retail stores aren’t your schtick, NIO still has a plan for you, namely: the NIO App. Like the physical locations, the NIO app is both a place for potential customers and current owners. While the company has just over 15,000 vehicles on the road, NIO’s app has over 800,000 downloads and over 200,000 daily active users.
The NIO app is as much of a social media app as it is a vehicle-companion. Users can post photos, share their recent trips, report issues with their vehicles, or share general posts about their lives. While the app is currently only available in Mandarin, you can often find posts from users announcing their reservations, deliveries, or exciting road trips. The NIO app is great for fostering connections between potential users and current owners, allowing people to act as ambassadors for the brand; thus creating a continuous sales funnel for the company.
For owners, the app has a whole other layer of functionality. They can manage their vehicles, send bugs and feedback, and schedule a service appointment. Additionally, owners can use the “one-click for power” feature to have NIO specialist come to recharge their vehicle, either with a mobile van or at a NIO supercharger or swap station.
Building Out a Services Business.
To date, NIO has seen the service used over 100,000 times by customers. While charging at home is readily available for most EV owners in the US or EU, NIO reported that only 78% of their owners were able to install a home charger, making the service more than just an added value, but a necessity for some.
All NIO owners can use the “one-click for power” feature 12 times per year at no cost, but after that NIO offers a per-time fee or a monthly subscription. NIO charges ¥980/month or ¥10,800/year ($145/month or $1604/year) to give owners the service 15 times per month. NIO opened this service up to non-NIO vehicles at the Shanghai Auto Show, allowing all EV owners to subscribe to the service.
In addition to their power subscriptions, the company allows owners to lease their batteries. For ¥1660/mo ($247/mo) owners can lease either the 70kWh or 84kWh packs, dropping ¥100,000 ($15,000) off the purchase price of the vehicle. This opens up NIO’s vehicles to a wider audience, with the lowest ES8 costing ¥348,000 ($51,600) and the ES6 costing ¥258,000 ($38,300). In comparison, the Tesla Model X starts at ¥737,100 ($109,500) and the Model 3 costing ¥377,000 ($56,000). While NIO owners will continue leasing the battery pack for the entirety of their ownership, it will allow them to upgrade to larger capacity batteries in the future. Between power subscriptions and battery leases, NIO could be building out a substantial services business.
Is it sticking?
With production facilities, a strong retail presence, and a dedicated power-delivery network, NIO certainly doesn’t have a capacity issue. The company could start delivering 5,000+ cars next month and have plenty of capacity and staff to handle the volume. NIO’s vehicles don’t seem to be the problem, they’re well-built, packed full of industry-leading features, and competitively priced in their segments.
What is unclear, is whether NIO’s expensive retail and club strategy are truly generating enough sales. The company is doing minimal advertising, leaving their stores and app as its core sources for sales. With over 9,500 employees on payroll and a factory running below capacity, the company is under pressure to raise sales amid economic headwinds, which is no easy feat.
Between the company’s focus on electric SUV’s, a unique retail strategy, a lifestyle-focused app, and a variety of user-centric services, NIO differentiates itself from both competitors abroad and at home. Whether the upcoming ES6 is a hit, is to be seen, but the company has all the pieces in place to deliver a positive ownership experience for buyers.
I recently took my Tesla Model Y running Full Self-Driving (Supervised) v14.3.3 over 150 miles on the Pennsylvania Turnpike in an effort to truly put the system under a stress test. There were a lot of good moments, and some bad, but overall, Full Self-Driving impressed me.
Last Thursday, I decided it was time to visit the Flight 93 National Memorial near Shanksville, PA. I go a few times a year, and it was a beautiful day. Others have taken some pretty lengthy drives using FSD, but I haven’t had the opportunity to really do something lengthy in quite a few months on an older version. I decided it was the perfect opportunity to try some things out.
I recorded the entire ride there on a GoPro, edited to highlight the crucial moments, and shared them on our social media accounts. If you want to watch them, I’ll share them throughout the piece, but I did not get to do a real breakdown of what I felt about its performance.
Overall Thoughts
I realize it is probably better to do a summation of its performance toward the end of the piece, but I feel like it is also reasonable to lead with this because I was overly impressed with how well it handled everything. The only moments where I felt a little bit of reason to touch the wheel, at least while traveling on the Turnpike and Rt. 30, were due to other drivers and their behaviors.
I have taken many drives to the Memorial over the past several years, and although it’s not incredibly long, it is a tiring drive. It’s about five hours both ways, close to 300 miles, and I think most of the exhaustion comes from the toll of sitting in the car and then visiting something that is pretty heavy to take in.
This was the first time I’ve ever taken the ride and not felt like I needed to avoid my vehicle after I got home. In the past, I could not even think about driving after I finally arrived at my house, but this was simply different.
It was nice to have something else take the drive for me, while I still had the freedom to take over if I chose to. It made the entire trip more enjoyable.
Full Self-Driving Recognizes Lane-Ending Arrows on Road
After traveling in the fast lane for a little while, FSD noticed the arrows on the road indicating the lane was coming to an end ahead. The car was also in the process of making a pass on a slower vehicle in the middle lane, but aborted this maneuver and backed off to get behind the vehicle.
I was really impressed by this because I thought that the car would absolutely try to make the pass, only to get in front of the other car, and then slow back down to 75 MPH:
WATCH: Tesla Full Self-Driving v14.3.3 recognizes lane-ending arrows, aborts pass of slower traffic, and gets in line https://t.co/1dxvTOw5Cn pic.twitter.com/SOpuj9ZHyP
— TESLARATI (@Teslarati) June 2, 2026
Full Self-Driving Notices Veering Tractor Trailer, Adjusts Lane Positioning
My two rules of the road are never cruise in the fast lane and never drive next to a tractor-trailer. This clip is a perfect example as to why.
FSD v14.3.3 recognized this tractor-trailer attempting to change lanes while we were still next to it. The car shifted its lane positioning to the shoulder slightly to make room for the merging semi, executed the pass safely, and on we went.
I will admit this one made me a little nervous, but more so because of the 18-wheeler, and not because of the Tesla:
WATCH: Tesla Full Self-Driving v14.3.3 notices tractor-trailer veering into lane, shifts lane positioning to create space, completes pass safely https://t.co/1dxvTOw5Cn pic.twitter.com/E35UrP79CH
— TESLARATI (@Teslarati) June 2, 2026
Full Self-Driving Follows the Rules of Tunnel Travel
Many people who are not familiar with Full Self-Driving and its capabilities are pretty limited in what they know about the really simple things it does well. Part of supervising FSD is being aware of things it might make mistakes with, and anticipating maneuvers it might want to make at the wrong time.
Entering the Blue Mountain Tunnel on the Turnpike, I was ready for FSD to attempt to get back into the right lane after making a pass on a tractor-trailer, but I was pleasantly surprised. Several signs outside the tunnel advise drivers to stay in the lane they’ve chosen while driving through the tunnel; this eliminates the possibility of an accident caused by lane changes, which would impede traffic on a crucial logistics route.
I was happy to see that Tesla Full Self-Driving v14.3.3 did not make this mistake:
WATCH: Tesla Full Self-Driving follows rules of tunnel travel, recognizes double lines, and does not change lanes https://t.co/1dxvTOw5Cn pic.twitter.com/L6eEP5bCE9
— TESLARATI (@Teslarati) June 2, 2026
Full Self-Driving Navigates Toll Plazas with Ease
I was interested to see how FSD would handle toll plazas, including the speed at which it would travel through them, and whether it would stop on the Turnpike at these booths, which have since been transitioned to a “Toll by Plate” system, which mails you a bill.
It was flawless:
WATCH: Tesla Full Self-Driving v14.3.3 seamlessly handles toll plaza, smoothly merges back onto Turnpike https://t.co/1dxvTOw5Cn pic.twitter.com/XmwY7rkj9J
— TESLARATI (@Teslarati) June 2, 2026
Full Self-Driving Still Struggles with Parking from Time to Time
Since I took delivery in late August, I’ve never had a single instance of my Tesla struggling to park at a Supercharger. Other spots at the mall, market, or gym are another story.
This was the first time it did such a terrible job of backing into a spot. This required me to take over and manually park at another charger:
Tesla Full Self-Driving v14.3.3 had trouble backing into the Fort Littleton, PA Supercharger, even though it was the only vehicle there.
This required manual parking. https://t.co/1dxvTOw5Cn pic.twitter.com/7xgqH2Z0ye
— TESLARATI (@Teslarati) June 2, 2026
Full Self-Driving Gets Confused After Arriving at Its Destination
This was the first time I have ever experienced FSD getting confused and just circling the lot. The navigation continued to reroute to try to resolve the issue, but after four laps, I decided it was time to overtake the car’s controls and park manually:
Experienced the same thing a few days ago
I think one of the big features a lot of people would appreciate is parking preferences or spot selection https://t.co/RCVwUOMxoY pic.twitter.com/U9f1wW2np9
— TESLARATI (@Teslarati) May 31, 2026
This was a baffling behavior that I truly couldn’t explain. Other owners communicated that they have also experienced this issue.
Final Thoughts
I am so incredibly impressed by FSD that it has really made traveling stress-free. The two issues related to parking were not ideal, but to be fair, I usually take over when arriving at parking lots. However, this shortcoming is something Tesla has to make some serious progress with, because parking has truly stumped FSD at times.
Solving that will be a major breakthrough for autonomy, but Tesla has struggled with it for some time.
All in all, FSD v14.3.3 is unbelievably accurate and handles many of the more stressful maneuvers with ease, one of them being avoiding merging traffic on highways, which was shown above.
Some things that would be great to see improvements on are parking, Speed Profiles, which are relatively tough to adjust (I stayed in Standard for the duration of this drive), and, of course, navigation.
Elon Musk
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
A single line in SpaceX’s amended S-1 just sent Tesla stock down 5% in one day.
A single line buried in SpaceX’s amended S-1 filing is doing more to move Tesla’s stock price than anything Tesla itself has announced in months. The clause, disclosed as SpaceX prepares for what could be the largest IPO in Wall Street history, states that the company “may issue a significant amount of equity in connection with future transactions.” While this may be seen as boilerplate language in S-1 filings, the historical ties between SpaceX and Tesla, and with Elon Musk reportedly discussing a possible merger with close colleagues, investors are interpreting it as something closer to a signal.
The concern among institutional investors like Gary Black, managing director of The Future Fund, pointed directly to the amended filing on X, saying it “strongly suggests more SPCX equity will be issued,” which could potentially be used to acquire Tesla. He estimated such a deal could be 28% dilutive to Tesla shareholders since SpaceX would likely command a significantly higher valuation multiple. Black added that institutional investors he knows hate the idea of a combination because they prefer pure plays over conglomerates, which he said “nearly always gravitate to the lowest common multiple.”
The Tesla and SpaceX merger everyone is talking about is quietly building
The bull case runs the math differently. Tesla influencer and retail shareholder advocate AleXandra Merz pushed back on what she called a widespread misunderstanding of how merger-of-equals deals actually work. Rather than simply splitting the difference between two market caps, a merger exchange ratio is negotiated based on relative fair market values, meaning the lower valued company typically sees its stock reprice upward toward the deal value.
Under her model, SpaceX enters at a $2.5 trillion valuation and Tesla at $1.6 trillion, producing a combined entity worth $4.1 trillion split evenly between both shareholder groups. That implies Tesla’s side of the deal would be valued at $2.05 trillion, a gain of roughly $450 billion from its current market cap. She cited Dow-DuPont and CBS-Viacom as historical examples of how markets reprice both companies toward the announced exchange ratio after a deal is unveiled.
What does a Merger of Equals mean to Elon’s compensation packages?
Well, it changes everything.
Enjoy https://t.co/uekCldyITw pic.twitter.com/kolq1C9qTu
— AleXandra Merz 🇺🇲 (@TeslaBoomerMama) June 1, 2026
The SpaceX S-1 amendments also revealed just how much financial infrastructure already binds the two companies together. As Teslarati has reported, SpaceX purchased $697 million in Tesla Megapacks, $131 million in Cybertrucks, and the two companies have shared supply chain resources, and semiconductor fabrication plans since well before any merger conversation became public. A retail poll by Tesla influencer Sawyer Merritt is finding that 36% of respondents do not plan to buy SpaceX shares at IPO and 15.3% saying their decision depends on the valuation.
Do you plan on buying @SpaceX stock at its IPO?
— Sawyer Merritt (@SawyerMerritt) June 1, 2026
Whether the merger happens or not, the amended filing is seemingly moving markets and sharpened a debate that is no longer theoretical. SpaceX is weeks away from trading publicly, and Tesla shareholders are now watching every word of every filing for clues about what Musk plans to do next.
Tesla is staging a powerful rebound in Europe. New vehicle registrations surged dramatically across multiple key markets in May 2026, signaling a strong recovery from the challenges of 2025.
Data released this week show double- and triple-digit year-over-year gains in several countries, driven by refreshed Model Y production, supportive policies, high fuel prices, and renewed consumer interest in electric vehicles.
In France, registrations exploded 655 percent to 5,446 vehicles, marking Tesla’s best May performance ever in the country. Norway, a longtime EV stronghold, saw 3,345 new Teslas registered, up 29 percent from May 2025. The company even captured a commanding 21.5 percent market share there, according to Detroit News.
Growth extended to other markets as well. Sweden posted a 71 percent increase to 858 registrations. Denmark jumped 136 percent to 1,750 units, where the Model Y became the top-selling vehicle overall. Spain climbed 113 percent to 1,690 sales, while Portugal soared nearly 350 percent to 1,463.
RELATED:
Tesla Full Self-Driving expansion in Europe continues with new addition
The May results build on a broader turnaround for Tesla in Europe. The company’s sales on the continent had declined sharply in 2025, dropping between 27 and 28 percent amid production shifts, intense competition from Chinese rivals like BYD, and shifting consumer sentiment.
Early 2026 showed signs of life, with registrations rising about 45 percent across Europe in the first quarter and continuing upward momentum through April, up over 46 percent region-wide.
Europe’s overall electrified vehicle market (including BEVs, PHEVs, and hybrids) grew about 21 percent in May, providing a favorable tailwind. Tesla’s gains align with this trend, boosted by government incentives and high fuel costs that make EVs more attractive.
Earlier data from March and April already hinted at strength in Germany, where registrations had surged dramatically in prior months.
Analysts note that while competition remains fierce, Tesla’s refreshed lineup and Europe’s policy support for EVs are helping the company regain ground. The May surge suggests the worst of the 2025 downturn may be behind it, positioning Tesla for stronger performance in the second half of 2026.
This rebound is welcome news for the EV pioneer, demonstrating resilience in a competitive and evolving market. As more data rolls in, investors and industry watchers will be closely monitoring whether this momentum can sustain through the summer and beyond.
Tesla Full Self-Driving attempts 150-mile stress test: the good and the bad
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
