NIO, a Chinese EV maker launched its new model ES7, a smart electric mid-large SUV, on June 15, 2022. As an EV company, it is true Nio has been leading the transformative trend in transportation and has helped reduce carbon emissions. To customers, the ES7 model itself has many appealing features; however, the lack of public available information regarding its materials and manufacturing process makes it impossible to draw the conclusion that the vehicle is a sustainable product. It is not known whether the emission and pollution from the production would be offset by the reduced carbon emission. EV is certainly a complex product, but I do wish to see more transparency from Nio about its materials, production process, and other aspects.
The body of the car is made of aluminium and carbon fibre. This has made the body light and rigid. Thus, the body of the car would be lighter than if it is made of steel, making it possible for the vehicle to travel further per unit of battery power. Alumninium is considered by some as an environmentally friendly metal as it could be recycled infinitely, but the production process is energy intensive and may cause pollution. In the past, Nio has partnered with large aluminium providers such as Novelis and Magna. However, the detailed information about the source of aluminium used for ES7 is not available. Similarly, nothing is really explained about the carbon fibre and how it was sourced and produced.
Part of the interior uses karuun® sustainable rattan. Rattan refers to various species of Old World climbing palms typically found in Southeast Asia. It is considered environmentally friendly because it can be fully grown and harvested within two years, is long-lasting, and biodegradable.
Battery is an essential part of electric vehicles. The battery is made of ternary lithium and lithium-iron phosphate. Unlike many other EV producers, Nio offers ‘Battery-as-a-Service (BaaS)’, meaning that the customers can buy the car without a battery and pays a monthly subscription fee. It grants customers access to its 1000 ‘battery swapping stations’ and 6000 power chargers and 10,000 destination chargers in China. It takes only about 5 minutes to swap the battery, which is very convenient to car owners. The feature is also rolling out in Europe. However, there is no information online about the environmental impact of the battery services and battery swapping stations. Thus, it is very difficult to judge whether it is sustainable or not.
Of course, ES7 contains many more different types of materials given its complex structure and design. However, while there is a detailed introduction about the parts and features, not much public information about their materials is available. Due to the lack of information, I cannot give them a high rating for this section.
In Nio’s most up-to-date annual report, they claimed that they ‘actively leverage clean energy’ both in their plant and partners’ facilities during the manufacturing process. For instance, they have utilised photovoltaic technology and ground-source heat pump system. They also recycle water, aluminium and other scrap materials in their plant and aim to further expand their recycling efforts throughout the product lifecycle. However, these are pretty much all the information that can be found about sustainability of the manufacturing process. It is difficult to verify these claims since no data and supporting evidence is available to the public.
NIO is a smart electric vehicle producer funded in 2014. As an EV producer, they are a leader in accelerating the green transformation by reducing transportation’s reliance on fossil feuls. On their website, they state that they have reduced carbon emissions by over 131,484 tons altogether. While this sounds impressive, I wish to know more about how it is calculated, what is the benchmark (e.g. comparing Nio EVs to what kind of cars?), and what is the net effect if we take into account the carbon emission from the manufacturing process, transportation, and operation.
NIO has implemented several sustainability initiatives in recent years. For instance, NIO Life launched a green-thinking product line, Blue Sky Lab, to create eco-friendly fashion products by reusing the scrap materials, such as leather and fabric, during the manufacturing process. They have also launched Clean Parks, an ecosystem co-construction initiative in ecologically sensitive areas in China, aiming to contribute to ecosystem building and adopting clean energy infrastructure in the nature reserves. They have recently partnered with WWF China in the Clean Parks initiative. However, I am slightly concerned about these efforts because they are quite high-profile and relatively detached from their core business. Overall, I would like to see more substantive efforts in improving sustainability and transparency in more aspects of Nio’s operation. I also want to see more gender balance on their leadership board as there is currently only one female director who just joined in 2021.
Currently, all Nio cars are manufactured in Hefei, China. In June 2022, one Nio member of staff and a person from a partner company died when a vehicle fell from the building. The two people were testing a new vehicle in a showroom on the third floor of Nio’s headquater in Shanghai. While accidents happen all the time, I think Nio urgently needs to improve its worker protection to prevent such incidents.