NIO Inc. ( NIO ) is reportedly preparing to launch operations in Hong Kong in the fourth quarter of this year, adopting a distributor-led model instead of direct sales.

The move will place NIO in direct competition with EV heavyweight Tesla Inc. ( TSLA ) , which already holds a strong foothold in the Hong Kong market.

The move signals a strategic shift by the electric vehicle maker as it expands into global markets with lower capital intensity, CnEV Post reports, citing local media.

The company intends to mirror its Macau approach in Hong Kong by partnering with a local distributor rather than establishing its own retail network, the report adds.

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CnEV Post noted that this asset-light model will also be adopted in new markets such as Azerbaijan and Brazil.

NIO will formally introduce its new Macau distribution partner, Guangdong Hongyue Automobile Sales Group, on July 1.

Hongyue has been granted exclusive rights to manage market operations, service infrastructure, and ecosystem development across NIO’s three brands—NIO, Onvo, and Firefly—in the region.

The company previously used a direct-sales approach in Europe but began transitioning to distributor partnerships in late 2023.

Hongyue’s responsibilities in Macau will include brand promotion and user support.

Although NIO has not officially announced its Macau launch, hundreds of its vehicles already operate in the area, facilitated by the city’s openness to left-hand drive cars, unlike neighboring Hong Kong.

To support its growing footprint, NIO has built two battery swap stations in Macau—one inaugurated in late 2021 and another in October 2023. These installations hint at the company’s long-term intentions for the region, even prior to formal distribution deals, CnEV Post adds.

Price Action: NIO shares are trading lower by 1.7% to $3.41 at last check Thursday.

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