NIO BEGINS DELIVERY OF EL8 SUV INTO EUROPE DESPITE TARIFFS ON CHINESE EVS

Undeterred by the threat of punitive tariffs imposed by the European Union, NIO (NYSE:NIO) has begun deliveries of its EL8 to European customers after launching at the beginning of the summer.

The SUV was initially built on NIO’s (NIO) NT 1.0 platform but underwent a refresh earlier this year on the newer NT 2.0 platform and included LiDAR as well as a chip upgrade to the cockpit, Electrek reported. The vehicle was also renamed the EL8 from ES8 in Europe to avoid a nameplate dispute with a similarly named Audi (VWAGY, VWAPY).

As the sixth NIO model in the European market, the EL8 is now available in Sweden, Norway, Germany, Denmark, and the Netherlands, and comes despite the risk of punitive tariffs against imported Chinese EVs that could reach 45% (NIO faces a tariff of 21%, however, as it cooperated in the EU Commission’s investigation).  

Chinese automakers are not only facing significant resistance in the European Union, but the U.S. and Canada, as well, both of which proposed equally crippling tariffs of 100% on any EV manufactured in China. This includes domestic carmakers as well, who take advantage of the cost efficiencies of cheaper labor, more abundant raw materials, and lower logistics costs in China. On average, China’s manufacturing sector can produce an electric vehicle 20% cheaper than in the West.

To compensate for the loss of competitiveness, Western governments have taken aggressive measures to keep cheap Chinese EVs out of their markets. But even with restrictive tariffs, most Chinese automakers, including NIO (NIO), are still able to earn a “comfortable” profit in Europe “because of the substantial cost advantages they enjoy,” according to consultancy firm Rhodium Group.

NIO (NIO) shares closed 6.8% lower in U.S. trading on Wednesday. 

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