Nio is piloting a new retail cooperation model in China that allows users to open stores while the company provides sales staff, as the electric vehicle maker seeks to expand its physical presence without the capital requirements of its flagship showrooms.
Under the arrangement, Nio does not provide financial support to store operators but dispatches sales consultants, known internally as Fellows, to sell vehicles on-site, the local outlet Lanjinger reported.
The model differs from both Nio‘s direct-sales approach and traditional authorized dealership structures used by its rivals.
The format has already been implemented in Guangzhou, where it takes the form of a coffee shop branded as “Nio Workshop,” according to the report.
“What we are doing is creating offline touchpoints within circles; automobiles are a long-term business,” a person familiar with the matter told Lanjinger, adding that the cooperation does not involve formal authorization but rather “deep cooperation within communities and social circles.”
Direct Sales Expansion Slows
Nio has built its brand in China primarily through direct sales via its flagship Nio Houses and smaller Nio Spaces showrooms.
The company had 187 Nio Houses worldwide as of June 30.
However, the capital-intensive model has proven difficult to scale internationally.
After expanding directly into five European markets in 2021 and 2022, Nio has shifted to partnering with local distributors in newer markets to reduce fixed costs and accelerate expansion.
Israel became the first market where Nio entered via a local distributor when it partnered with Delek Motors a year ago.
Denmark became earlier this year the first market where Nio switched from direct sales to a distributor model.
The company is now applying a similar partnership approach in Southeast Asia, the Americas, and additional European markets.
Profitability Target Looms
The retail experiment comes as Nio pursues its first profitable quarter.
Founder and Chief Executive Officer William Li said during the third-quarter earnings call in November that the company is confident it will achieve profitability in the fourth quarter.
Nio delivered a record 87,071 vehicles in the third quarter, up 40.8% year-over-year, while revenue reached a record 21.79 billion yuan, a 16.7% increase.
November deliveries for Nio‘s main brand reached 18,393 vehicles, an 18.7% increase from a year earlier, though group-wide volume fell 10.2% from October to 36,275 units.
Li warned last month that November would “still be tough” with December remaining “uncertain” as the industry grapples with reduced consumer incentives.
The premium brand said earlier this Thursday that it delivered the 30,000th unit of its ES8 three-row SUV 89 days after the vehicle launched in September.
