Source: Securities Times.
Author: Nie Yinghao

On the morning of October 5th, $NIO Inc (NIO.US)$ / $NIO-SW (09866.HK)$ The official WeChat account announced that on October 4th, NIO and the strategic investor CYVN signed a strategic cooperation agreement to establish an advanced technology R&D center in Abu Dhabi, UAE, focusing on intelligent driving and artificial intelligence technology research and development. NIO and CYVN will also jointly develop a new vehicle model tailored for the local market.

At the same time, NIO announced that it will officially start operations in the Middle East and North Africa region. The operation will be carried out through a joint venture established by NIO and CYVN—NIO Middle East and North Africa Company.

It is reported that the United Arab Emirates will become the debut market for nio inc in the Middle East and North Africa region. According to the plan, nio will operate its entire system in the United Arab Emirates in the fourth quarter of this year.

Nio's globalization strategy takes another step forward.

Earlier in August of this year, nio's official website and social media platforms in the United Arab Emirates were already launched, with the appointment of a local business manager announced. At that time, this move marked nio's official launch of its presence in the Middle East market, and nio also confirmed to the media that this account is managed by the newly established nio United Arab Emirates team.

Nio's founder, director, and CEO, Li Bin, said: "We are bullish on the development prospects of smart electric vehicles in the Middle East and North Africa markets. As an important strategic investor and partner of nio, CYVN has rich resources in the region, which will help nio's business achieve sustainable growth in that area. The cooperation between nio and CYVN will further advance the company's global and technological innovation strategies, accelerate nio's globalization process, and bring innovative smart electric vehicle technology and experiences to users in the Middle East and North Africa."

It is reported that CYVN is an investment institution majority-owned by the Abu Dhabi government of the United Arab Emirates, with a strategic focus on the smart mobility industry. Established in 2022, the fund aims to invest in global industry leaders in this field. In 2023, nio reached a strategic cooperation with CYVN, which has now become the largest shareholder of nio.

In recent years, nio has been accelerating its global expansion. As early as 2021, nio had entered the European market. In May 2021, nio launched the ES8 model in the Norwegian market, simultaneously commencing the construction of battery swap stations. Then, in August 2022, nio held a press conference in Berlin, the capital of Germany, marking the full-scale entry into the European market.

Currently, nio has entered the markets of five European countries with the entire system. By the end of September 2024, 6 production models including EL8 (ES8 in the Chinese market), ET7, EL7 (ES7 in the Chinese market), ET5, ET5T, and EL6 (ES6 in the Chinese market) have entered the European market. Nio has established 56 battery swap stations, connected to over 0.6 million third-party charging piles, and built 8 nio centers, 10 nio spaces, and 45 nio service centers in Europe.

Automakers are racing to expand into the Middle East market.

Heading to the Middle East market is not a unique overseas direction for Nio Inc, but a common 'battleground' for car companies to go overseas. In recent years, the automotive industry in the Middle East has experienced vigorous growth and transformation. As one of the emerging markets, the Middle East has become the focus for global auto manufacturers seeking growth space.

The Middle East has a great demand for electric cars and supporting facilities. According to the report '2024 Electric Car Outlook: UAE Edition' released by PwC, it is expected that by 2030, the market share of electric cars in the sales of new passenger cars and light commercial vehicles in the UAE will exceed 15% (about 0.058 million vehicles), and by 2035, this share will increase to 25% (about 0.1105 million vehicles).

Chinese electric cars are very popular in the Middle East market. Currently, car companies going overseas have become an industry trend, and the Middle East has become an important market that major car companies are striving to develop. In the first 10 months of 2023, the export volume of Chinese cars to the Middle East was 0.5781 million vehicles, a year-on-year increase of 32.61%, with new energy vehicles exceeding 0.11 million vehicles, a year-on-year increase of 66.44%.

Electric cars have become a new business card for Chinese brand cars in the Middle East region. Chinese electric cars, with high cost performance and attractive designs, are increasingly favored by Middle Eastern consumers. In 2023, the United Nations Climate Change Conference (COP28) was held in Dubai, where electric buses serving the conference came from Yutong Bus Co.,Ltd. $Yutong Bus Co.,Ltd. (600066.SH)$N/A.$BYD Company Limited (002594.SZ)$/ $BYD COMPANY (01211.HK)$ Electric buses from manufacturers like Yutong bus co.,ltd. in China account for more than half.

In September 2023, $GEELY AUTO (00175.HK)$ Another electric vehicle brand under its umbrella$ZEEKR (ZK.US)$The cars separately signed national distributor agreements with dealers in the UAE, Saudi Arabia, Qatar, and Bahrain to jointly build sales and service networks; in March 2024, the Zeekr 001 and Zeekr X electric cars started sales in the UAE and Saudi Arabia.

Since 2023, BYD company limited has entered the Middle East market, entering countries like the UAE, Saudi Arabia, Jordan, Qatar, and Israel. In May 2024, BYD officially opened its first store in Riyadh, the capital of Saudi Arabia. In June 2024, BYD completed its 1000th delivery in the UAE. BYD has established a leading position for electric vehicle brands in the Middle East region.

Other Chinese electric vehicle companies such $GWMOTOR (02333.HK)$ / $Great Wall Motor (601633.SH)$Please use your Futubull account to access the feature.$BAIC MOTOR (01958.HK)$Please use your Futubull account to access the feature.$Chongqing Changan Automobile (000625.SZ)$Please use your Futubull account to access the feature.$XPeng (XPEV.US)$/ $XPENG-W (09868.HK)$ Skyworth and others are also actively expanding into the Middle East market.

Haike Setz, global and Middle East electric vehicle leader at PwC, predicts that in the coming years, more electric vehicle models from Chinese companies will be seen in the UAE. However, some industry analysts point out that European, American, Japanese, and Korean cars still dominate the Middle East market in terms of recognition, acceptance, and market share. To change this market landscape, Chinese car companies still need to make more efforts.

Editor / jayden