Chinese electric vehicle (EV) company Nio (NIO -0.48%) grew its revenue by 122% to $5.7 billion last year. The company has delivered roughly 183,000 EVs so far, primarily in its domestic market. However, Nio is expanding deliveries to other countries and is focused on the European market. Let's see why its international growth strategy looks solid.
Europe leads in EV adoption
Norway is the first international market that Nio is targeting. The company currently delivers around 100 vehicles every month to the Scandinavian country. In 2022, it intends to start selling in Germany, the Netherlands, Sweden, and Denmark. Its focus on the European countries looks prudent considering that Europe is one of the top regions in EV adoption.
Image source: Statista.
Focusing on the 27-member European Union (EU), the market share for both gasoline and diesel cars fell by around 9% in the first 10 months of 2021, according to Statista. In contrast, the share of hybrid electric cars registered in the EU rose 8.8% during the same time frame. The share of plug-in hybrid and battery electric cars also rose.
Specifically, four EU members -- Germany, France, Italy, and Spain -- were among the top seven countries globally by share of battery EV registrations as a percentage of total car registrations. Two other European countries, not in the EU, are among the top seven.
Image source: Statista.
China is the only non-European country in the seven countries with the highest share of electric car new registrations.
Norway topped the list, with 64.5% of all the cars registered in the country being battery electric in 2021. Germany followed, with 13.6% of all new car registrations being electric.
Nio's home market, China, stands third in terms of share of new EV registrations. In Great Britain, 11.6% of all new car registrations were for electric ones. By comparison, only 2.6% of all new cars registered in the U.S. last year were electric.
Image source: Getty Images.
Nio's growth focus
Nio's primary market is one of the top countries where EV registrations as a percentage of total car registrations are the highest. And outside China, the company is already delivering electric cars in Norway, and plans to start selling in Germany this year. With that, it will be selling cars in all the top three markets in EV registrations.
Nio's operations in Europe should provide greater recognition for its brand globally. That should pave the way for it to establish itself as a global player. Developed markets could also allow the company to generate better margins than its domestic market in the long term. Overall, the EV maker's focus on the European markets bodes well for its growth.
