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“Tesla of China” NIO cancels plans to build a local factory after heavy 2018 losses

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6 years ago

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NIO, the Chinese electric vehicle startup with its eyes set on Tesla’s luxury auto market consumers, revealed some production stumbling blocks in a press release on Tuesday detailing its Fourth Quarter and Full Year 2018 Financial Results. One of the most notable points of interest was its decision to cancel plans to build a Shanghai manufacturing facility in favor of continuing to contract work to state-owned JAC Motors. The report also revealed $1.4 billion in losses, doubling the losses experienced in 2017, despite meeting production and delivery goals for the year.

Even without having a factory to call its own, NIO currently has two SUV vehicles for sale, the ES8 and coming ES6. Having a deal with the government – one where the government makes a product for a company rather than the other way around – may seem unusual, especially in the US. However, it’s par for the course in China. In a call with investors following the news release Tuesday, NIO chief financial officer Luis Hsieh commented that such arrangements are “endorsed and perceived as an innovative manufacturing model in China.” As a result, NIO has been able to put vehicles on the road quickly, giving it an edge over the extensive competition in the country.

It’s also interesting to note that NIO represents one of hundreds of China-based EV companies hoping to cash in on Chinese government incentives driving the ramp up of the all-electric car market. With 5 million annual EV sales expected to come from China in the near future, startups like NIO and established electric brands like Tesla are eyeing a bright future full of growth. Tesla’s Shanghai-based Gigafactory 3 is a nod to their high sales expectations in the country.

NIO’s ES6 electric SUV command panel. | Credit: NIO

NIO’s deal with JAC Motors is apparently hurting its bottom line, however. Along with a fee collected by the manufacturer for each vehicle produced, NIO is required to compensate JAC for any operating losses during the first 3 years of production. If that’s not enough eating away at the company’s progress, slow January/February markets, tough trading conditions resulting from the ongoing US-China trade war, and end-of-year sales ramps in 2018 are being offered by NIO as reasons for a delivery slowdown in the early part of this year. The company expects the slowdowns to continue into the second quarter of 2019 for largely the same reasons.

The bad financial news from NIO is perhaps a bit surprising considering that the announcement is on the heels of a 60 Minutes feature wherein CEO William Li was hopeful for the company’s prospects in China’s EV market. NIO has been positioned as a lifestyle company rather than simply a car maker, offering exclusive owner perks like clubhouses and on-demand charging solutions. Li’s plans also include eventual entry into the international market, and the company already has offices around the world seemingly to aid in this effort.

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Perhaps without Tesla’s experiences coming to market shining a light on what’s possible during a new EV manufacturer’s development path, news like NIO’s announcement would immediately spell impending doom for such a new company in a still-evolving market. That is not quite the case, of course, and NIO, along with the numerous EV startups begun in Tesla’s wake, have essentially a wealth of information available to learn from as applicable to their national situations. Even still, just as Tesla and SpaceX CEO Elon Musk often stated that “rockets are hard” despite decades of space launching knowledge being available, so too are electric vehicle companies.

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Accidental computer geek, fascinated by most history and the multiplanetary future on its way. Quite keen on the democratization of space. | It's pronounced day-sha, but I answer to almost any variation thereof.

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Elon Musk reveals Tesla’s next Robotaxi expansion in more ways than one

Tesla Robotaxi is growing in more ways than one. Tesla wants to expand and hopes to reach half the U.S. population by the end of the year.

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4 hours ago

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July 24, 2025

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Credit: Tesla

Tesla CEO Elon Musk revealed the company’s plans for its next expansion of the Robotaxi in terms of both the geofence in Austin and the platform overall, as it looks to move to new areas outside of Texas.

Tesla launched the Robotaxi platform last month on June 22, and has since expanded both the pool of users and the area that the driverless Model Y vehicles can travel within.

The first expansion of the geofence caught the attention of nearly everyone and became a huge headline as Tesla picked a very interesting shape for the new geofence, resembling male reproductive parts.

The next expansion will likely absolve this shape. Musk revealed last night that the new geofence will be “well in excess of what competitors are doing,” and it could happen “hopefully in a week or two.”

Musk’s full quote regarding the expansion of the geofence and the timing was:

“As some may have noted, we have already expanded our service area in Austin. It’s bigger and longer, and it’s going to get even bigger and longer. We are expecting to greatly increase the service area to well in excess of what competitors are doing, hopefully in a week or two.”

The expansion will not stop there, either. As Tesla has operated the Robotaxi platform in Austin for the past month, it has been working with regulators in other areas, like California, Arizona, Nevada, and Florida, to get the driverless ride-hailing system activated in more U.S. states.

Tesla confirmed that they are in talks with each of these states regarding the potential expansion of Robotaxi.

Musk added:

“As we get the approvals and prove out safety, we will be launching the autonomous ride-hailing across most of the country. I think we will probably have autonomous ride-hailing in probably half the population of the US by the end of the year.”

We know that Tesla and Musk have been prone to aggressive and sometimes outlandish timelines regarding self-driving technology specifically. Regulatory approvals could happen by the end of the year in several areas, and working on these large metros is the best way to reach half of the U.S. population.

Tesla said its expansion of the geofence in Austin is conservative and controlled due to its obsession with safety, even admitting at one point during the Earnings Call that they are being “paranoid.” Expanding the geofence is necessary, but Tesla realizes any significant mistake by Robotaxi could take it back to square one.

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Tesla warns customers of incentive strategy on EVs as tax credit nears end

If you’re thinking of buying a Tesla, the time to order is now, the company claimed.

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6 hours ago

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July 24, 2025

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(Credit: Tesla)

Tesla has warned customers about its incentive strategy for qualifying electric vehicles, as the days of both the $7,500 EV tax credit for new EVs and the $4,000 credit for used EVs are coming to a close.

Both tax credits, which impact some of the vehicles in the Tesla lineup, are set to be eliminated at the end of Q3. The phase out of these consumer credits was always in the plans of the Trump Administration, but now we’re in the final quarter of their existence.

As a result, EV companies are scrambling to see how they can reduce costs or make their vehicles more affordable for customers. The $7,500 will price many consumers out of many EVs on the market, and Tesla is not immune to that.

However, Tesla has made a significant push into Q3 deliveries, rolling out numerous incentives to customers, including 0% APR on select purchases, lease deals, free upgrades on certain inventory units, and more.

The extensive list of incentives on Tesla vehicles in the quarter will not get any longer, either. During last night’s Tesla Earnings Call for the second quarter of 2025, company executives stated that their intention for these incentives was to encourage customers to place orders early in the quarter.

Tesla will only be able to apply the $7,500 credit with deliveries that occur before the end of September. Even if an order is placed before then, delivery must be completed by September 31 to receive the tax credit.

CFO Vaibhav Taneja confirmed that the incentives for the quarter are already out and encouraged customers to place an order sooner rather than later:

“Given the abrupt change, we have a limited supply of vehicles in the US this quarter. As we are already within lead times to order parts for cars, we have rolled out all our planned incentives already and will start pairing them back as we start to sell. If you are in the US and looking to buy a car, let’s roll now as we may not be able to guarantee delivery for orders placed in the later part of August and beyond.”

The loss of the incentives will impact every EV maker in the United States. Tesla has a plan moving forward, and it said last night that its affordable models would be rolled out in Q4, as introducing these cars any earlier could have detrimental effects on Model 3 and Model Y sales.

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Tesla Model Y awarded Top Safety Pick+ from IIHS

The new Model Y continues to impress with this new award.

Published

8 hours ago

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July 24, 2025

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(Credit: Tesla)

The 2025 Tesla Model Y was one of two midsize luxury SUVs to receive the Top Safety Pick+ award from the Insurance Institute for Highway Safety (IIHS).

To qualify for the IIHS’s Top Safety Pick+ or even the lower-tier Top Safety Pick label, vehicles need good ratings in the small overlap front and side crash tests, an acceptable or good rating in the pedestrian front crash prevention evaluation, and acceptable or good ratings for headlights across all trim levels.

The difference between the two labels is that an “Acceptable” rating in the moderate overlap front test will get a car the Top Safety Pick rating, but a “Good” rating in this category will win the elusive Top Safety Pick+ category.

The 2025 Model Y, codenamed “Juniper” internally by Tesla, was released in the United States earlier this year and received the top rating across each of the categories, automatically qualifying it for the Top Safety Pick+ label:

Other vehicles in Tesla’s lineup have extraordinary marks in crash testing according to other agencies, like the National Highway Traffic Safety Administration (NHTSA), but there are reasons those cars are not on the IIHS lists.

In 2024, we reported that the IIHS had evaluated some Tesla vehicles for the necessary tests to achieve these marks. Joe Young of the agency told us that the Model 3, for example, was not featured on either the Top Safety Pick or Top Safety Pick+ lists because the vehicle had several missing tests.

Here’s why the Tesla Model 3 wasn’t an IIHS Top Safety Pick+, and why it could be soon

This is not to say those other Tesla vehicles would not perform well. The Cybertruck performed better than any pickup has ever in NHTSA crash testing assessments.

The Model Y is Tesla’s most popular vehicle and was the best-selling car in the world over the past two years. Tesla’s intense focus on safety continues to show that this priority goes into every decision the company makes regarding design and engineering. This focus has continued to pay dividends as some real-world crashes save the lives of those inside the cars.

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