People gather at the booth of Chinese electric vehicle start-up Nio as it unveils its ES8 SUV at the Shanghai autoshow, in Shanghai, China April 19, 2017. REUTERS/Aly Song

Thomson Reuters

People gather at the booth of Chinese electric vehicle start-up Nio as it unveils its ES8 SUV at the Shanghai auto show, in Shanghai

Electric car startup Nio just made a huge move to challenge Tesla in China, which is rapidly becoming the most important market for companies pursuing battery-powered vehicles.

Nio unveiled its electric SUV, the Nio ES8, at the Shanghai motor show on Wednesday. The startup said the vehicle will go into production by the end of this year and will be made specifically for the Chinese market. Deliveries are expected in 2018, the company said. 

China had more electric car sales than Europe and the US in both 2015 and 2016, a trend unlikely to slow as the government continues to tighten fuel emissions standards.

Tesla has been making moves to gain traction in the country; it tripled its revenue in China to $ 1 billion in 2016, though it still makes more money in the US. 

Chinese internet company Tencent acquired a 5% stake in Tesla in March, highlighting a vote of confidence in Tesla’s position in the world’s most populous country. (Tencent has also invested in Nio.)

Nio, which is based in Shanghai, is smart to introduce a large SUV at a time where demand for the vehicles is on the rise among affluent Chinese buyers. The startup has offices in Shanghai and San Jose and is led in the US by former Cisco CTO Padmasree Warrior.

Scroll down for a closer look at the Nio ES8:

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The electric SUV seats seven and comes with all-wheel drive, but Nio didn’t disclose any specs like horsepower, acceleration, or range. So it’s difficult to tell just how well it will compete with the likes of Tesla’s Model X SUV.

Nio didn’t say where it will manufacture the car, but said its manufacturing and supply chain are “already in place.” The vehicle will come with a swappable battery.

It features a digital instrument cluster and large infotainment console.

Nio has attracted major investors. Tencent and Baidu led an $ 87 million funding round in the startup in March. Sequoia Capital and Lenovo have also invested in Nio, formerly named NextEV.

Nio has raised nearly $ 1 billion and is valued at $ 2.9 billion.

Sources: Motley Fool, Crunchbase

Nio plans to sell 10 of its electric supercar, the EP9, for $ 1.48 million a pop. The car can accelerate to 195 mph and has a range of 265 miles, Nio claims. It can accelerate to 62 mph in just 2.7 seconds.

Nio also plans to sell an electric, self-driving vehicle in the US in 2020, the company announced at SXSW in March. The startup has an autonomous testing permit in California.

Nio unveiled Nio Eve, its concept car pictured above, at SXSW in March to announce its autonomous driving plans. You can read more about Nio’s US plans here.

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