Produced by Zhineng Auto
In August 2026, NIO sold only about 100 units in our monitored overseas channels, appearing in just 10 out of the 49 monitored markets.
Whether it is Leapmotor, XPeng, or Li Auto and Xiaomi, which are planning to go overseas next, why is NIO different from the rest?
The top three markets—Belgium, Portugal, and Norway—accounted for a combined 131 units, representing 86% of the total overseas volume.
Part 1: NIO and Other Chinese Automakers Are Taking Two Different Paths to Go Global
The top three overseas markets for NIO—Belgium, Portugal, and Norway—are not core major markets in Europe.
Norway was once NIO's first stop and stronghold for going overseas, with monthly sales reaching two to three hundred units between 2021 and 2022, but now it stands at just 37 units a month. Germany recorded 1 unit, and the Netherlands 4 units.
In 2024, NIO publicly announced the shift of its European operations from a direct-sales model to a dealership model and the downsizing of NIO Houses in multiple countries. Markets like Germany and the Netherlands, which it entered with high profiles back then, are now basically clearing inventory.
Southeast Asia is just getting started, with 6 units sold in Singapore.
On NIO's global map, only a few scattered dots remain on the western edge of Europe, indicating it is in a period of overseas strategic contraction.
Chinese automakers treat Europe as a car sales market: export first, find dealers, validate sales volume, and build factories only when the scale is sufficient.
NIO, however, wants to transplant the entire business system that has proven successful in China—direct sales, user communities, self-operated services, battery swapping, and BaaS (Battery as a Service)—to Europe.
When user density is sufficient in China, this approach can build a moat. However, in Germany, where only a few hundred units are sold a year and merely 19 units were registered in the first eight months of this year, it conversely turns into a highly costly trap.
Closing the German Hub is NIO's admission that its previous European expansion model—characterized by heavy assets, full direct sales, and ecosystem-first strategies—is no longer viable.
For most Chinese automakers in Europe, fixed costs gradually increase with sales volume. NIO, however, had already shouldered a massive amount of fixed costs before any significant sales volume materialized.
A Hub in Cologne covers approximately 2,600 square meters, featuring a showroom, maintenance, warehousing, and delivery functions, acting as a scaled-down regional operations center. When a Hub serves thousands or even tens of thousands of car owners, it can deliver efficiency and brand stickiness. But when only one new car is registered in Germany in a month, it is almost impossible to establish a reasonable return on investment.
Therefore, when other automakers struggle to sell in Europe, their losses mainly involve inventory, marketing expenses, and dealer subsidies. When NIO struggles to sell, its offline spaces, service personnel, delivery systems, maintenance capabilities, battery swapping networks, and regional management costs simultaneously lose their basis for cost allocation, leaving the entire ecosystem without enough users to sustain it.
Part 2: The Moat Turns into a Density Trap in Europe
NIO's competitiveness in China is largely built on network density. The more users there are, the higher the utilization rate of battery swap stations. The denser the battery swap stations, the better the vehicle experience. And the better the experience, the more users it can attract.
NIO Houses, mobile services, one-click maintenance, and car owner communities all require a sufficiently large user base to dilute costs. This is a positive cycle.
Upon entering a new market, this cycle can reverse. Fewer users lead to low utilization rates of service points and battery swap stations, resulting in excessively high per-vehicle service costs, which halts network expansion. Users then worry about service and residual value, becoming even more reluctant to buy cars, leading to a further decrease in users.
This negative cycle has already emerged in Germany. After closing the facilities in Cologne and Weiterstadt, users in regions other than Munich rely more on partner repair shops. NIO has promised to continue providing warranties and services, but the notice did not explicitly list the repair enterprises taking over the business.
For ordinary brands, this is merely a decline in service convenience. For NIO, which takes "hassle-free service" as its core selling point, this directly damages its brand promise.
One of the reasons consumers buy NIO is that it differs from the general dealership system. Now that the sales scale is insufficient and it ultimately reverts to a third-party repair network, users will question: why should they still pay a premium for NIO's services?
The contraction in Europe is not just about cost reduction; it may also weaken the differentiation it most wanted to establish when initially entering the European market.
Cooperating with the EU investigation, NIO is subject to a countervailing duty rate of approximately 20.7%, which, stacked with the 10% basic import tariff, indeed creates significant pressure on import costs. During the same period, other Chinese brands are still growing rapidly in Europe.
Difficulties in the European market do not mean Chinese cars cannot be sold there. More critically, the product, channel, brand, and service networks have not formed a matching scale.
In Germany, NIO faces the most mature and conservative luxury car users in Europe. These users typically value brand history and long-term viability, leasing prices and corporate car policies, used car residual value, repair network coverage, parts supply time, and the vehicle's resalability after four or five years.
Having good products does not equate to the establishment of a luxury brand for NIO. When German users buy BMW, Mercedes-Benz, or Audi, they are not just comparing range, screens, and acceleration; they are also buying predictable residual value, a dense service network, and brand credibility accumulated over decades.
NIO needs to invest heavily to gain this credibility, and the lower the sales volume, the higher the cost of building it.
NIO originally intended to use battery swapping and services to compensate for the shortcoming of lacking brand history, but battery swapping requires support from vehicle ownership volume. Without enough battery swap stations, consumers are unwilling to pay for the battery swapping capability. Without enough consumers, the company cannot continue building battery swap stations. This is the second chicken-and-egg problem.
Tesla also used direct sales and built its own charging network in its early days, but it had globally standardized products, sales volumes far exceeding NIO's, and easily understandable fast-charging value. NIO's battery swapping involves dedicated stations, battery reserves, model compatibility, and battery asset management, making the system complexity significantly higher.
NIO retains its R&D, design, and intelligent driving adaptation capabilities in Europe, while simultaneously scaling back its direct-sales network in the region.
Conclusion
From a global perspective, NIO no longer replicates the Chinese model exactly in Europe; it should retain its brand core while changing its delivery methods.
Channels must shift towards an asset-light model. Sales and basic maintenance should be increasingly handed over to local dealership and service groups. NIO will only retain a few flagship experience centers, technical training, parts centers, and quality control capabilities, accepting lower channel control in exchange for lower fixed costs.
This approach can be further tracked with Firefly.