A startup is taking on Tesla with a stunning SUV in the hottest market for electric cars

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 is planning to battle Tesla in the most lucrative market for battery-powered vehicles: China.

Nio will sell its electric SUV, the ES8, in China in early 2018. The move puts the startup in direct competition with Tesla as it looks to gain traction in the country.

China had more electric car sales than Europe and the US in both 2015 and 2016 and has also exhibited faster sales growth.

Tesla has 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 Munich and San Jose and is led in the US by former Cisco CTO Padmasree Warrior.

We spoke to Warrior about the ES8 and what to expect - scroll down for a closer look:

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