Is NIO Really "Only Leasing and Not Selling" in Germany, the Netherlands, Denmark, and Sweden? Why?
On October 7. 2022. during the NIO Berlin 2022 event held in Berlin, Germany, NIO officially announced its entry into the markets of Germany, the Netherlands, Denmark, and Sweden. At the event, three models—EL7. ET5. and ET7—were introduced, and it was announced that these vehicles would be available through subscription and leasing.
The announcement caused a stir in the media, leading to widespread reports that NIO was "only leasing and not selling" in Europe. Simultaneously, many users in NIO’s overseas community began to question, “Can't we buy the cars? How can we buy them?”
Why Did NIO Choose Subscription and Leasing for the Four European Markets?
Subscription Leasing as the Key to Entering the European Market
This isn’t NIO's first venture into the European market. Previously, NIO adopted a sales model in Norway. So why the switch to a subscription model for Germany, the Netherlands, Denmark, and Sweden?
“Market data indicates that 80% of European consumers prefer subscribing to or leasing cars. In the initial phase of exploring business models, we aim to reach a wider audience,” said William Li, Founder, CEO, and Chairman of NIO, during the Q&A session after the Berlin event.
Additionally, addressing user concerns about buying cars after the event, William Li posted on the European version of the NIO App, saying, “We underestimated the enthusiasm of users for buying cars. Subscription leasing is just the beginning of NIO’s business in Europe. We have always been open to selling cars, and our sales model will further expand in the future.”
From this, it’s clear that NIO is not "only leasing and not selling" in the four European markets. The pre-market research indicated that subscription leasing is the most suitable way to enter the European market.
The Scale of the European Leasing Market
Germany is Europe’s second-largest and the world’s fourth-largest leasing market, with passenger cars accounting for 56% of the leasing business. Recently, the German car rental company SIXT placed a large order for 100.000 BYD vehicles, highlighting the strong demand and tradition for car subscriptions and leasing in the European automotive market. This is the main reason NIO chose subscription as its sales model.
William Li commented, “There is still much room for improvement in NIO’s subscription and leasing services in Europe. We will continue to refine and meet user needs in multiple dimensions. Operating a subscription and leasing business is more challenging than merely selling cars. We believe that the experience gained from the subscription and leasing business will lead to more diverse sales models in the future.”
Reporter’s Commentary: Leasing is Just a Door Opener.
Post-Market Ecosystem as the Future Sales Model Lever
“Unlike China, new energy vehicles (NEVs) are still a novelty in Europe. Although Europe is also fully deploying NEV charging networks, most equipment is still for slow charging. Based on this, NIO’s subscription model allows us to better help improve the post-market ecosystem for NEVs in Europe,” pointed out Qin Lihong, Co-founder and President of NIO.
Apart from differences in automotive consumption habits, the progress of NEV development varies significantly across countries. Unlike traditional fuel vehicles, NEV sales require a complete post-market ecosystem: charging and swapping infrastructure, user community building, and comprehensive parts supply. Clearly, these conditions are currently lacking in the four European countries.
NIO’s earliest entry into Europe was in Norway, because Norway has the most well-developed NEV promotion in Europe. In the European market, Norway is known as the "pure electric car nation." In 2019. the Norwegian Parliament approved the "50% policy," stipulating that toll road and parking fees for pure electric cars should not exceed 50% of the current standard. Data shows that by 2021. the number of pure electric cars in Norway reached 330.000. Considering a population of just under 5.4 million, NEVs are extremely popular in Norway. Additionally, Norway has a large number of private charging piles and fast charging piles, with Norwegian car charging equipment accounting for 10% of the total in Europe.
However, these conditions are not present in the current four European countries. NIO’s subscription model in Germany, the Netherlands, Denmark, and Sweden is largely aimed at cultivating NEV consumption habits and establishing a comprehensive post-market ecosystem. In markets without infrastructure, blindly promoting car sales is just empty talk.
During the NIO Berlin event, a German business representative mentioned, “Last week, we built NIO’s first battery swap station in Germany. We plan to have 50 stations by the end of this year and 1.200 stations by 2025. In the future, the range will exceed 500 kilometers.”
Reporter’s Commentary: Adapting to Local Conditions with Different Entry Methods.
Only Leasing, Not Selling Is a Misinterpretation; Selling Cars Takes Time
So far, we have clarified why NIO initially announced the subscription model. Recently, there were also sources revealing William Li’s response to the "only leasing, not selling" issue— "We mentioned offering a subscription model, but never said we wouldn’t sell cars."
“NIO adopted a subscription model in the four European countries so that our business team can focus on a single business model during the initial promotion phase. For a new team entering a new market, this is the most efficient approach. We have always been open to selling cars and are further preparing for it. Currently, our main focus is on promoting the subscription model both online and offline. We will continue to pay attention to community user suggestions and meet user needs to the greatest extent possible,” William Li explained in his article on the European version of the NIO App.
Selling cars is a long process, especially overseas. In the automotive industry hub of Germany, NIO faces strong competitors with solid user bases like BBA. Using the subscription model to reach the largest audience, understanding user needs through community feedback, and building a post-market ecosystem to support more diverse sales models is a cautious strategy for NIO's entry into the European market.
Reporter’s Commentary: NIO Never Lacks Patience.
Ending with a quote from William Li during an interview after the launch event:
“We believe this is just the beginning. We have already invested substantial resources in car research and infrastructure construction. Our future plans are progressive and paced. Tesla took 16 years to become profitable; we will definitely be faster.”
