Techbuzz China in Association with DealStreetAsia

NIO – The Road Ahead for “China’s Tesla”

A NIO Eve autonomous concept electric car. Photographer: Qilai Shen/Bloomberg

In Ep. 22 of TechBuzz China, co-hosts Ying-Ying Lu and Rui Ma talk about electric carmaker NIO, which went public on September 12 on the NYSE. This episode covers how NIO got started, its purported business model, and how it differs from its competition.

Listeners will also hear from Elliott Zaagman, a writer covering Chinese tech as well as an organizational development consultant for Chinese tech firms.

Rui and Ying-Ying start their story with Li Bin, or William Bin Li, who is NIO’s celebrity Founder, Chairman, and CEO. Li Bin, only 43 years old this year, is known as the “godfather of the transport sector” in China: not only did he have his first IPO in 2010 for a car-related internet company named BitAuto, but he has also invested in at least 32 companies in the transportation sector, including 5 unicorns. Indeed, Li Bin is widely recognized for being a master at both making and raising money.

However, Li Bin and NIO’s path in the electric vehicle (EV) industry has not been without its challenges, particularly because of the domestic sector’s past experience with unreliable players such as Yueting Jia, the founder of LeEco and Faraday Future. In fact, one recent Chinese article cheekily called NIO and its fellow EVs “the cars that came out of PowerPoints” – a partial reference to the fact that NIO raised about $2.5B in four rounds before going public, but is still losing money rapidly, to the tune of half a billion dollars in the first half of this year.

Listen to the newest episode of TechBuzz China and join our co-hosts in an exploration that seeks to answer the key question: is Li Bin going to be able to deliver on the hardware he promises? Just how comparable is NIO to Tesla? What about to Xpeng Motors, founded by celebrity entrepreneur He Xiaopeng, the other high-flying EV unicorn in China with an internet DNA? What is NIO’s actual business model, when it does not actually make its own cars, or even its own batteries (yes, you read that right)? Is it accurate to consider NIO a luxury brand, and if so, is that the right strategy in China?

As always, you can find these stories and more at Let us know what you think of the show by leaving us an iTunes review, like our Facebook page, and don’t forget to tweet at us at @techbuzzchina to win some swag!

Full Transcript

We are TechBuzz China by Pandaily, powered by the Sinica Podcast Network.
We are a new weekly podcast focused on giving you a peek into what’s buzzing within the tech community in China. We uncover and contextualize unique insights, perspectives and takeaways on headline tech news that don’t always make it into English language coverage. TechBuzz China is a part of, a new English language site that tells you “everything about China’s innovation.”

(Y: Ying-Ying Lu; R: Rui Ma; E: Elliot Zaagman)

[0:00] Y: Mirror, mirror on the wall, who’s the best Chinese EV maker of them all?
R: That’s EV for electric vehicle, yo. And by best, we are talking about the best out of a whopping 487 Chinese electric car makers, as reported by the Wall Street Journal a couple of months back.
Y: And I’m not sure that today we will get to the answer of who’s the best, because most of these companies are simply too new to really tell. The one we are focusing on today – NIO, which went public last week on September 12, at a market cap of about $6.4 billion, had only delivered 481 of its ES8 7-seater SUVs by July 31, as detailed in its IPO prospectus.

[0:49] R: And it’s only scheduled to deliver a total of 10,000 by the end of the year. Which was why I was excited to see one actually on the road last week when I was in Chengdu, China. It didn’t look bad. But it wasn’t striking. Who am I to judge though? I hate driving and don’t even own a car, although I do borrow a Tesla 3 from time to time.
Y: And Rui, you’ve both seen and driven my car, and you know that I’m not super particular about it. So there you go, we aren’t gearheads and we really would need a magic mirror to tell us which car is the best. But, what we can tell you, which I do think we’re good at, is how NIO got started, and how it’s different from its competition, especially this company I know quite well, Xpeng Motors, or 小鹏汽车.

[1:38] R: Yep. NIO versus Xiaopeng. It’s another one of those, you guessed it, Tencent versus Alibaba wars, with NIO being backed by Tencent, and Xiaopeng being backed by Alibaba. Again, we have the two Ma, two horse race, as always. But, we’ll be concentrating on NIO today, although there’s no avoiding talking a little bit about Xiaopeng. They’re as different as night and day.
Y: What are we waiting for? Start your engines guys!

[3:02] R: Shoutout to some of our select listeners, David Denstedt, Christopher Lim, Hsu Kang Li, Jacky Liang, Johann Biermann – and to all those who continue to give constructive feedback.
Y: Oh, and special thanks to our new partners at Deal Street Asia, who began syndicating our podcast this week. Hello if you’re listening to us from DSA!
R: If you enjoy listening to us, please take the time to leave us a rating or review on iTunes, Facebook or wherever you get your podcast!

[3:41] Y: If we want to talk about NIO, originally known as NextEV, we gotta talk about Li Bin, aka William Li, who is NIO’s 灵魂人物, or NIO’s heart and soul. And also its celebrity founder, chairman, and chief executive officer.
R: Li Bin, now that name sounds familiar. Here’s a test for our most hardcore fans. Where have we mentioned it before?
Y: Well, besides the fact that it is a pretty common name, some of you might remember we mentioned a key character named Li Bin from the episode on Mobike. He was the angel investor who, legend has it, supposedly had the idea for an on-demand bike rental system and wrote the initial check for Hu Weiwei to execute the project.

[4:25] R: If you remembered that from our earlier episode, you are definitely a Techbuzzer extraordinaire, and should tweet at us for swag. Seriously. But back to Li Bin, by the time Mobike was getting started in 2014/15, he was already quite famous, right?
Y: Yup, even though he is only 43 years old this year, he had his first IPO eight years ago, on November 17, 2010, for a company called BitAuto, or 易车集团. He was also founder and CEO and Chairman there, until January of this year that is, when he abdicated the CEO role. However, he remains Chairman.

[5:00] R: Bitauto, which trades on the NYSE under BITA, is about $1.6 billion market cap these days. On its own website, it describes itself as “a leading provider of internet content & marketing services, and transaction services for China’s fast-growing automotive industry”, I think, though, Techcrunch explains it a little bit better by writing that it’s “, Consumer Reports and Auto Trader all rolled into one.” All you really need to take away is that it’s one of the leading car-related internet companies in China.
Y: Now you might be wondering, that’s cool, that Li Bin founded China’s, but does that make him qualified to make an electric car, which is probably quite different from selling cars?

[6:00] R: Well, what if I told you he’s a really great investor in the transportation sector? Or mobility sector, as it’s fashionable to call it these days? I’m not gonna go into all of his successful investments here, but according to a detailed profile on him last year, he’s invested into at least 32 companies in this sector, including 5 unicorns, that’s including Mobike, by the way. In Mobike he began with a 29% stakeand fully exited the company earlier this year when it was bought by Meituan for almost $3 billion dollars. Not bad right? That’s why Chinese people call him 出行教父, Chuxing, which means travel, and Jiaofu, which means godfather. Which is basically saying, he’s the boss in this space.
Y: Everyone is a godfather in China! It’s like the most common complimentary title. I think it sounds a little ridiculous. Although, please do feel free to call us 中国科技播客教母. China tech podcast godmother. But again, Rui, being a good angel investor in the car space doesn’t mean you are good at making cars. What else you got?

[7:06] R: OK, OK, you got me. I don’t know. Li Bin was a sociology major at Peking University and was never known for his technical chops. I guess the argument most of his fans throw out is that so what, Elon Musk didn’t know how to make cars either before he took over Tesla. What Li Bin really does have, though, is a reputation for making money, which helps him to raise money, which is, if you think about it, a key competitive advantage to making cars. Because it takes a lot and a lot of money. Cold, hard cash.

[7:40] Y: I am just giving you a hard time, Rui! Your reasons are all valid. First of all, Richard Liu of JD and Li Guoqing of Dangdang were all sociology majors! Remember you don’t really get to pick your major in China, so it doesn’t have much correlation with your interest, just your gaokao entrance exam score. Secondly, Li Bin has a pretty great reputation in the tech sector in China already. Liu Erhai 刘二海, formerly of Legend Capital and now with his own fund, Joy Capital, a very respected VC and Midas Lister, summed it up quite nicely: Everyone believes in Li Bin, because everyone has made money off of betting on him succeeding. Even when Mr. Liu hesitated on the Mobike deal, he went ahead and invested just because it was a Li Bin deal and look what happened with that, I believe he’s done just fine.

[8:26] R: Well, I would say Li Bin had a pretty awesome reputation in China. It’s now a little bit more mixed, although I really don’t think it’s his fault. The main issue was this person named 贾跃亭, YT Jia, founder of LeEco and Faraday Future, the latter an electric car company that basically turned out to be a fraud. Actually, technically we don’t really know what happened, whether it really was all fraud or just crazy bad strategy, but there are plenty of lawsuits outstanding and plenty of people, myself included, believe that it was the former, but Jia Yueting basically tried to beat Netflix, Apple, and Tesla all at the same time – zero kidding here – and failed miserably. But what he did was that he left a stink on the EV industry in particular, because he was so high profile about his product announcements, the Faraday Future FF91, which turned out to be complete vaporware, that Chinese people just began associating all sorts of negative things with any fancy electric car concepts they saw. This meant that when NIO first showed off its car last April, and started taking pre-orders last December, people understandably asked – Is Li Bin just another Jia Yueting, or is he a Lei Jun, the Xiaomi founder who actually delivers the hardware he promises?

[09:51] Y: The fear runs deep. One article cheekily called NIO and its fellow EVs, the cars that came out of PowerPoints. I mean, that’s kind of true. Milk Tea Sister, wife of JD CEO Richard Liu, wrote that Richard invested in NIO after a brief fifteen-minute presentation by Li Bin. And he wasn’t the only billionaire who invested. Remember we said that Li Bin knows that cars are very very expensive to make? So he got not one, but six billionaires to invest early in NIO, knowing that it would take a lot of capital before there would be any NIO cars actually on the road. Pony Ma of Tencent, Lei Jun of Xiaomi, Neil Shen of Sequoia Capital, Lei Zhang of Hillhouse Capital, Li Xiang of Autohome. Funny aside there – aside from traditional carmakers, the person Li Bin was most afraid of getting into the EV space aswell was Lei Jun. Which is why he was super relieved when Lei Jun didn’t do that and instead became an investor.

[10:50] R: Well that worked, because NIO raised about $2.5 billion in four rounds over four years before going public. But it’s still losing money rapidly. It had half a billion dollar net loss for the first half of this year. On a whopping 7 million dollars of revenue from vehicle sales. That’s right. The entirety of its revenue so far in the company’s entire existence is literally the same as a median price of a house in Atherton here in Silicon Valley. That’s a popular enclave, by the way, of many Chinese VCs and tech entrepreneurs.
Y: While the company still has $668 million on its balance sheet as of June 30, most people think it was going to have to raise more capital quickly to really ramp up production. It decided to go IPO rather than do another private round. Why? We really don’t know. The rumor is that Tencent, which owns about 13%of the shares and 22% of the vote, was unwilling to put in more money. It does own 5% of Tesla, after all, so maybe Tencent was freaked out by the lack of profits and the immense need for the capital they’re seeing there. Either way, IPO plans were pretty concrete by April of this year and Softbank was rumoredto participate.

[12:12] R: But funding was not secured. Softbank pulled out last month. Although it was only supposed to be putting in $200 million, that made the IPO look even less attractive. You see, NIO was initially rumored to go public at $37 billion USD. I honestly have no idea why, but that was the rumor on Chinese media back in December of 2017. There was a lot of exuberance back then though, if you’ll remember, around all Chinese preIPO tech companies. Anyway, when NIO’s SEC filings came through, the number that NIO was supposed to raise was more like $1.8 billion. When it finally did come to pass, however, after Softbank said no, the actual funds raised was closer to $1 billion, basically at the lowest end of expectations, for what we said earlier is a market cap of $6.4 billion. $37 billion USD market cap? No, more like $37 billion RMB …

[13:13] Y: And since NIO’s comp was Tesla, and everyone called it China’s Tesla, it didn’t help that Elon Musk was going a bit nuts on Twitter and on Youtube. Supposedly Li Bin was even asked during the IPO roadshow, do you smoke, drink, or tweet?
R: Hilarious stuff. But it’s a lot deeper than that. Detail-oriented fans probably noticed that we put quotation marks around the words “China’s Tesla” in the title for this episode. That’s because it really isn’t much of a Tesla. There are so many things that are different. But first, Li Bin has publicly stated that he doesn’t want to be China’s Tesla, he wants to be the world’s NIO.

[10:50] Y: Tesla is still a good company to be compared to, it’s still got a market cap that dwarves some traditional carmakers, but he’s been smart not to overemphasize this point in English, but yeah, Li Bin has dismissed Tesla as being an “old company,” born out of the Internet age, as opposed to NIO, which is only four years old and has mobile internet roots. Again, our US listeners might not feel like this is a super big distinction, but in China, where the smartphone really is the totality of many user’s internet experiences, it is a well acknowledged generational divide.
R: How does this apply to cars though? Well, the first thing is that apparently, NIO believes this means they don’t need to make cars.
Y: They don’t need to make cars?

[14:43] R: Exactly right. NIO does not make its own cars. See what I mean by it’s really not a Tesla? NIO outsources all manufacturing to Jianghuai 江淮汽车, a publicly listed, state-owned auto manufacturer in China. Well technically it’s a contract for five years, and NIO is supposed to be building its own facilities. Anyway, Jianghuai is known for making cheap, economy class cars. So, you can imagine the difficulty of it all of a sudden now making the most expensive domestic SUV in mainland China. The ES8 is also supposed to have one of the highest aluminum contents in SUVs, second only to a Jaguar. I don’t exactly know what that means, only that it’s very difficult to do so. Perhaps that’s why up until the IPO, NIO has only delivered 1381 cars, or only 900 or so since June 30, at a rate of what it’s looking like, approximately 100 per week? But whatever, right? If you drink the Koolaid, who cares about the fact that NIO doesn’t make its own stuff? Maybe if you’re tired of seeing Elon tweet that he just got back from the factory at 3 a.m. in the morning, this would be a plus, not a minus!

[15:53] Y: It also looks like NIO doesn’t make its own batteries. I mean, that makes sense. If you’re not making your own cars, why would you be making your own batteries? Its prospectus says that it’s only qualified one manufacturer for its batteries. Which is … maybe concerning? But like you said Rui, if you drink the Koolaid, who cares about who makes the batteries when there are so many cool ways of charging your car that NIO offers that no one else does! First there is the Power Home, OK, that’s charging at home, and that’s not that innovative, and of course you can use the 214,000 charging piles available nationwide in China … but oh look, NIO is going to have charging trucks! Called “Power Mobile,” you can charge for about 60 miles in ten minutes! And how about so-called “Power Swap,” which are stations where you can swap your battery quickly for a fully charged one! See? This is mobile internet thinking at play here.

[16:54] R: But what NIO does have in common with Tesla is the price point. At half a million RMB or so, we are talking about a $70,000 SUV. With government subsidies of up to $10,000, maybe your net price is $60,000. Sure, it’s cheaper than Tesla X, and actually cheaper than any other luxury car in China, which comes with significant tariffs, but again, this comparison only makes sense if you really do treat NIO as a luxury brand.
Y: Is NIO a luxury brand? Well, Li Bin certainly is trying to make it into one. He’s said over and over again that NIO is a lifestyle, not a car. According to Liu Erhai, NIO is selling you a service, not a car. He thinks that’s why Tesla won’t win in China, because according to him, EVs are still rather difficult to maintain in China due to poor infrastructure, and so Chinese customers will need a whole chain of services that are localized for their needs. Can a foreign company really do that? He thinks not.

[18:01] R: I never drove a car in China, so I’m not really sure what he’s talking about. But, I can understand what NIO thinks is a “localized service model.” For example, I saw one of their flagship NIO Houses in Shanghai just last week. I didn’t get to spend too much time there but it’s a very very fancy looking showroom. According to the prospectus, it’s not just meant to be a sales center, but also where NIO owners and prospective users get together and chill. Like a clubhouse of sorts. Quoting from the prospectus: NIO houses “may also feature a lounge for our users to relax and socialize, forums which consist of a theater and which we intend to be a place for gatherings, meetings or presentations, “labs” which are bookable meeting rooms and workspaces, a library, an open kitchen and a kids joy camp.”

[18:52] Y: This is just so bizarre. I mean, in the US, car dealerships are literally the places you want to leave as soon as possible, no offense to any of our fans who work there. But it’s China … and as you said, NIO Houses are in prominent spaces in fancy shopping malls, not just some parking lot in the middle of nowhere, so it’s possible … but I still find it a bit bizarre. Although, this is not the first time I’ve heard of Chinese entrepreneurs applying the concept of “user experience” to an extreme. Didn’t Li Bin also announce that he will hold ⅓ of his shares in a separate trust and give NIO owners a chance to give feedback on what to do with the profits on those shares?

[19:39] R: Yeah. He also said he wants to reach 100% user satisfaction as his KPI. But I’m so confused. As a driver, my satisfaction comes from driving a vehicle that I know will keep me safe and is easy to maintain. I don’t need to meet the other half a million NIO app users or hang out with them at the 7 NIO Houses.
Y: Well, guess who agrees with you? Xpeng Motors, or 小鹏汽车, the other high-flying EV unicorn in China right now with an internet DNA. It’s already raised $2 billion, and also has a celebrity entrepreneur, He Xiaopeng, who co-founded UC Web, a leading web browser that was eventually acquired by Alibaba in the largest internet M&A deal at that time. As we mentioned in this episode’s introduction, Alibaba is also a big investor in Xiaopeng, and while they already raised $4 billion RMB so far this year, supposedly they are looking to raise another $6 billion RMB, or basically $1 billion USD, by the end of this year.

[20:38] R: While like NIO, Xiaopeng doesn’t make its own cars, it also outsources to an auto manufacturer, it does have a drastically different price point at just $35K USD or so, half the price of a NIO. However, instead of building fancy customer experience centers, Xpeng has been focused on building infrastructure, putting in chargers all over the country. It also hasn’t delivered cars in volume yet … but claims that’s because it’s being extra careful. Everyone else is delivering their Version 1.0 models, but we are taking our time because we want to deliver a Version 2.0 car. That’s what He Xiaopeng is fond of saying anyways. It’s kind of true. They basically gave their employees the first 400 cars to test. The feedback of those employees led to changes which will be reflected in the cars being delivered later this year.

[21:28] Y: Xiaopeng is widely regarded as one of the main non-traditional contenders for EV glory, although as we’ve said earlier, there are almost 500 such companies now in China, and 3 others – WM 威马, Byton, and Youxia, are in unicorn category. Many, it must be said, are going after the same price point as Xiaopeng. Without doing a thorough analysis here, and just looking at the top funded players, less seem to be going after NIO’s price band. With the exception of Faraday Future, that is, whose newly revived carmaking efforts suggest a 350K price tag per vehicle, although there’s no delivery date in sight so that number may just as well be meaningless.
R: In fact, since now Li Bin has indeed delivered cars and proven himself able to make cars from PowerPoint, his main critics ask: how fast can he deliver them? And do people really want $60,000 cars?

[22:33] Y: I don’t, but anyway, both of these questions came to a head in early August, with He Xiaopeng said to media that “no car company can deliver 10,000 cars this year,” in direct opposition to what Li Bin had promised customers and shareholders. To prove himself, Li Bin immediately proposed a bet – if he does not deliver 10,000 NIOs by the end of 2018, he would personally gift He Xiaopeng an ES8.
R: What follows though is really much more interesting, so He Xiaopeng posted on his WeChat moments and says that he gladly accepts the bet and thanks Li Bin for his gift in advance. Then, 李学凌 Li Xueling, founder of YY, replies to that post and says there’s no way this will happen. He provides the following two reasons, both oddly written in English, but perfectly intelligible, so I will read them to you here:
1) In China, whoever turns the basic user of electric cars into the same user base as Pinduoduo wins.
2) Do not face urban white-collar workers to build cars, to build those for rural use cars. He who wins a diaosi wins the world.

[23:44] Y: That’s pretty funny, I’ll translate real fast for listeners unfamiliar with the terms Li Xueling is using, but basically he’s saying that Li Bin’s mission is doomed, because in China, you should really be appealing to the lower classes, not the well-to-do. There are so many more of them, after all!
R: Not surprising coming from the founder of YY, though, remember YY is a company that features prominently in our episode on livestreaming a few weeks back. We also covered the diaosi, aka loser economy in that episode, and delved deep into the Pinduoduo phenomenon too in Episode 17. Hint, Li Xueling got rich off of diaosi, so of course he’s going to have a soft spot for them.

[24:30] Y: Yeah, it seems like we are back to the same topic which has been buzzing in Chinese media for most of this year. What is the winning strategy for China? Is it consumption upgrade, i.e. appealing to upscale customers? Or is it consumption trickle-down, i.e. appealing to diaosi?
R: I’m going to cheat and say that I think both strategies work. In the US as well, you see a sort of barbell development, for example in retail. The luxury brands and the dollar brands are winning. Everyone else is getting creamed. But I’m not confident in applying this thinking to electric cars. And maybe we don’t need to, because it seems that for EVs, the macro trends are just too good in the near term, maybe your strategy doesn’t matter that much because your timing is just so good.

[25:17] Y: Yeah, in China, EVs are the thing. The Chinese government is pushing for EVs in a big way, ostensibly due to air pollution, but also to be able to show that it’s a global tech leader. The Wall Street Journal says that there have been $15 billion in subsidies already, with another $47 billion in the pipeline. China already has over 50% market share in EVs, which exceeded 1 million vehicles globally in 2017, and they want to have 7 million more on the road by 2025.

[25:50] R: NIO is certainly well aware of Chinese government policy. That’s probably why its Chinese name is 蔚来, which means Blue Sky Coming. It’s also a homonym for “Future.” But can it come out on top? Subsidies are scheduled to phase out in two years. As we said, there are a handful of other well-funded competitors. And don’t forget older, non-internet but perfectly capable carmakers like the Warren Buffet-invested BYD, which already sells more cars than Tesla. And while Tesla really should have been in China much earlier, it is also in Shanghai now. So there’s that.
Y: Yeah. There’s some great tailwind, but you also pointed out the headwinds. So in the face of such Darwinian competition, NIO really rushed to go IPO, despite having a pretty weak story. But don’t take our word for it. We asked our friend Elliott what he thought. But first, please introduce yourself.

[26:43] E: My name is Elliott Zaagman and I am a writer covering Chinese tech for the outlets Technode in English and I also write for the website Huxiuwang in Chinese. In addition to that, I am an organizational development consultant for Chinese tech firms as well as an executive coach for Chinese tech founders and CEOs.
R: Honestly, Elliott writes some super detailed stuff. You might want to check out his latest piece on debt, which features some of our analyses on Ziroom and Chinese rental real estate. But back to NIO. Is this a good time for NIO to be going public?

[27:22] E: Is this a good time for NIO to be going public? Absolutely not. It’s a terrible time for them to be going public. Sales for vehicles in China have absolutely plummeted in the last year or two. In addition to that, I think we are now seeing just how difficult it can be to mass produce electric vehicles, we are seeing this with Tesla and we are also seeing this with companies like Faraday Future. But it is really costly and you need a very long runway. So they need this money, but credit is drying up in China, it’s very very hard to get private financing right now in China, especially for something like this, they’re not going to be able to pay back their investors in the near term. I think that’s why they are going public, they need cash, even if it’s the wrong time for them to be doing it.

[28:19] Y: We really couldn’t find too much support online that NIO was ripe for a blockbuster IPO. Which kind of explains why, as we’ve already described, it priced at the low end of its offering, and traded flat the first day. But, then after we asked Elliott this question, NIO shot up like a rocket on its second day of trading, going up 75%. Maybe just to prove us wrong! Anyway, if you are a NIO believer and Li Bin fan though, we are happy for you.

[29:48] R: I mean, even if the IPO timing is awkward – come on, $7 million of revenues? I could still understand why Li Bin wanted to go for it. First, it’s likely that he really is running out of money. Making cars is super expensive and NIO has $3 billion RMB of debt due mid next year, apparently. And I couldn’t follow all the math exactly, but it was reported he might be losing $30,000 per vehicle, right now, just in costs. Of course, with economies of scale that should go down. But more worryingly, while he does have 16,000 preorders, only 6,000 of those customers paid a deposit of $6000, with most of the customers paying a nominal $700 意向金, or intention fee, which makes the demand for NIO’s a lot more questionable.

[29:36] Y: Yeah, new orders in July was 1900, and in August it was just 1600. The same automotive reporter noted that given that the factory in Hefei can already churn out 900 vehicles per month, are we sure NIO’s problem is one of production, or is it really one of insufficient demand?
R: So maybe a secondary reason, although probably a very distant secondary reason, is the fact that going public may help sales too. This is just pure conjecture on my part, but an IPO, especially in the US, is a supreme stamp of confidence and credibility in China, especially for consumer brands. Remember what Pinduoduo CEO Colin Huang said? He claimed that Pinduoduo didn’t need to go public, but that it wanted to do so in order to gain more trust from its customers.

[30:27] Y: Right, in China it’s super difficult to get listed since it’s a very onerous application process. The wait time is a few years. And then you have a minimum one year, maybe multi-year lockup. Oh, and you have to be profitable for most of the boards. So the NYSE or NASDAQ seem super easy by comparison. But many Chinese people don’t get that – they don’t differentiate, and think that the US government has done an incredible amount of due diligence on the companies listed here and that they’ve put their stamp of approval on it.

[31:02] R: It’s a common misconception, and I encounter it all the time. And it could work a wee bit in NIO’s favor. They’re a listed company now, after all. Consumers might think they’re more trustworthy.
Y: So what do you think, guys? Is NIO going to win over China, and later the globe, with its amazing customer experience? Or is competitor Xiaopeng better suited, because after all, he who wins a diaosi wins the world? Tweet @techbuzzchina and let us know your thoughts!

TechBuzz China by Pandaily is powered by the Sinica Podcast Network. is a new English language site that tells you “everything about China’s innovation.” You can find us on twitter at @techbuzzchina and @thepandaily, or reach out to Rui and Ying-Ying at @ruima and @ginyginy. Our producers are Carol Yin and Kaiser Kuo.