Li Bin has many reasons to be happy. Seeing the Chinese government’s backing for green tech, he teamed up with a former Ford executive to launch high-end electric vehicle firm NIO, which has been dubbed China’s answer to Tesla.
NIO’s first model, the jaw-dropping ES9, broke speed records at the famed Nürburgring racing track in Germany. On Thursday, the Tencent-backed firm generated $1 billion at its IPO in New York, putting its overall value at $6 billion. (Though less than earlier estimates of $8-9 billion.)
Meanwhile, NIO’s chief rival is having major problems. Tesla was forced to raise prices on its vehicles in China by 20% after Beijing boosted tariffs on American vehicles in retaliation for President Donald Trump’s hike on $34 billion of Chinese exports. The American firm’s stock has dropped more than a quarter from their high point last year. It is also facing lawsuits for alleged fraudulent company statements. And there were more legal woes after CEO Elon Musk’s bizarre and baseless accusation that a British diver, whom helped rescue a stranded football team from a cave in northern Thailand in July, was a “child rapist.”
More bad news appears on the way. On Friday, Trump said tariffs on an another $200 billion in Chinese imports would be inked “very soon.” He added that an additional $267 billion in Chinese goods were “ready to go on short notice.”
This should be music to Li’s ears. Beijing’s economic ministry spokesperson, Gao Feng, has said that “China will be forced to roll out necessary retaliatory measures,” which would seem to further boost NIO’s competitive advantage. Already, NIO’s ES8 electric SUV sells for $65,000, or around half the China road price of the most basic Tesla Model X.
Li, however, didn’t become a billionaire by ignoring the bigger picture. “There is no real winner in a trade war,” he tells TIME. “I believe a reasonable world leader should possess the wisdom to avoid a trade war instead of causing one.”
Trump campaigned that unfair trade with China costs American jobs. The former reality television star took particular aim at America’s current record $375.2 billion trade deficit with China, as well as Intellectual Property (IP) theft that the U.S. Trade Representative estimates costs between $225 billion and $600 billion annually.
Li, however, points to NIO’s more than 300 patents on battery replacement technology — which allows a NIO power source to be swapped out in just three minutes — as evidence Chinese firms now lead rather than steal technology.
“Objectively speaking, a long time ago there some rogue players in China that didn’t have enough respect for IP,” he says. “But today, I don’t see any of the major U.S. IP holders accusing China.”
Source:: Time – Business