Nine: paying for a car with a subscription, is it profitable?

Renault has long debated its battery lease formulas. In addition to this “battery as a service”, the Chinese manufacturer Nio wants to start with non-committal rental formulas. The bet seems daring for a manufacturer not known in Europe.

When choosing a new electric car, the motorist can generally choose a leasing agreement over several years, type LOA (Lease with Purchase Option) or LDD (Long-Term Lease), in addition to payments, cash or credit, more traditional. But new formulas tend to multiply, like what Nio announced on Friday, October 7, with different bearing solutions for their ET7, ET5 and EL7 models.

Until recently, Renault was one of the only manufacturers to try to offer separate monthly battery rental in Europe. If Fluence had not managed to take off with this offer, for Zoé, this controversial formula worked quite well until 2021. While Renault is done with this battery rental formula, new manufacturers like Nio or Vinfast rely on it to ensure their development on the European continent . Nio goes even further with its rental offer, with no time commitment. It is not yet available in France, but it is interesting to consult it to see what can await us.

A subscription to a Nio electric car to skip whenever you want

You have to believe that owning a car is no longer increasing. More and more offers, around the electric car, encourage the driver to become a temporary user and not the owner of his vehicle. However, it is not a question of subscribing to a classic car-sharing service either. It is Nio who remains the owner of the vehicle in this solution.

Launch of the European range of Nio. // Source: Nine

You can rent a Nio vehicle, from 1 to 60 months, on the basis of a monthly subscription. However, it is better to have a well-stocked wallet for this. The Nio models are placed more or less on the same standard as the German premium sedans (especially Mercedes). According to our colleagues from Frandroid, the price list for Germany is far from affordable:

Model Long-term rental (LDD 36 months) in Germany Rental without binding duration (monthly)
Nio ET5 (75 kWh) 999 euros €1,249
Nio ET5 (100 kWh) €1,175 €1,440
Nio ET7 (75 kWh) €1,199 €1,549
Nio ET7 (100 kWh) €1,311 €1,660
Source: Frandroid

With a minimum monthly rental of €1,249 for the ET5 sedan, this compares to the price of renting a 2-bedroom apartment in Paris (or a large house in the provinces). We understand better why Nio initially only targets certain countries with high purchasing power: Norway, Germany, the Netherlands, Denmark and Sweden. The brand should not attack the French market until 2024, and probably not with these products.

Nio ET5 // Source: Nio
Nio ET5 planned for 2023. // Source: Nio

This formula still includes: insurance, maintenance, winter tires, a spare car and a replacement battery, as well as the option to upgrade the batteries.

Nio is not the only Chinese brand to launch this type of subscription, with a very complete offer. Since 2020, Lynk & Co has also done this with its Lynk & Co 01 hybrid car, for a monthly subscription of €550/month. After one year, the brand announced that 90% of customers had chosen this non-binding solution over the traditional purchase. During the first 9 months of 2022, more than 2,000 Lynk & Co 01 were registered in France, all formulas combined (purchase or subscription). A good result, for a still unknown brand two years ago.

Lynk & Co 01 in non-binding subscription // Source: Lynk & Co
Lynk & Co 01 as a non-binding subscription. // Source: Lynk & Co

While the car is at the heart of many ecological concerns, it is hard to imagine that these no-obligation offers are a truly appropriate response. We make the car even more disposable than it already was. We can hope that these cars quickly find other homes where they will fulfill an equally punctual need, and then what? It’s still strange to compare the car to a simple Netflix subscription. However, this is the whole spirit of this approach.

Formulas with rental and exchange battery

Nio is the Chinese manufacturer that wants to succeed in battery replacement. Instead of recharging your battery, the brand prefers to direct you to a station that will change it for you in 5 minutes. The idea is to favor replacing your entire battery pack with another one that is already charging at the swap center. 3 of these centers are already planned in Germany. Nio plans to have 120 battery exchange stations in Europe by the end of 2023.

Nio ET7 and exchange center // Source: Nio
Nio ET7 and exchange center. // Source: Nine

The formulas, including a variable part for battery rental, therefore make it possible to adapt the battery’s capacity to a specific need. For example, only pay for the largest battery (100 kWh) in the months when it is needed. In Norway, Nio charges battery rental from €130 to €190/month, depending on the size.

More generally, tariff offers with battery hire offer a lower entry ticket compared to the price of the vehicle. The brand then obtains monthly billing for the battery. This formula allowed Renault to make its first electric vehicles more affordable, despite the batteries being quite expensive at launch. However, the main disadvantage of this formula is that renting can quickly become more expensive than buying over the months. At Renault, this formula has always created a debate among Zoé fans.

This does not prevent other foreign manufacturers from taking up the subject with confidence in Europe. Will they find the expected success there? We will know that in a few years.

VinFast VF8 // Source: Ulrich Rozier for Numerama
VinFast VF8. // Source: Ulrich Rozier for Numerama

Among these daring producers there is Nio, but also Vinfast, the Vietnamese producer. It has also decided to attack the European market with formulas that offer battery rental for its VF8 and VF9 models. Models due to arrive in Europe before the end of the year.

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