Faced with a cut-throat domestic market, many Chinese automakers have looked to grow their overseas sales in markets like Europe, Latin America and Southeast Asia to safeguard their future.

But on Tuesday, Nio CEO William Li gave a candid assessment of the challenges it had faced, saying its progress so far "has diverged somewhat from our earliest expectations".

"We underestimated the difficulty of expanding sales and service networks in Europe," Li told a group of journalists at an event before Auto Shanghai, the world's largest carmaking industry show.

In China, he said, it was easy to open up 100 shops in a single month -- in Europe that was very hard to do, and the cost was much higher.

Nio said Tuesday that Firefly, a brand of small cars designed for city living, would be released in Europe sometime in Q3.

It was initially scheduled to be launched in the first half of 2025.

Battery swap network progress in Europe had also fallen short of expectations, Li said.

As well as logistical hurdles, the firm has also been affected by geopolitics.

Brussels imposed extra tariffs on Chinese-made electric cars last year after an anti-subsidy investigation concluded Beijing's state support was unfairly undercutting European automakers.

"Under the current tariff conditions, a vehicle like the Firefly will of course see some impact on its price competitiveness," president Qin Lihong said.

Despite the challenges, Li said Nio remains committed to the European market.

The company will work to develop local partnership records, and will announce some new ones at Auto Shanghai.

"We believe that Europe requires a particularly long-term strategy and patience," Li said.

"So I don't expect a sudden surge in vehicle sales -- that's just not realistic."