Chinese electric vehicle manufacturer Nio has introduced its new budget brand, Onvo, with the launch of the L60 SUV. Priced as low as 149,900 yuan ($21,210) with a battery subscription plan, the L60 aims to compete aggressively against Tesla in the rapidly evolving EV market. Customers opting for the battery subscription will pay an additional 599 yuan per month, equivalent to just over $1,000 annually. For those purchasing both the car and battery together, the starting price is 206,900 yuan. Deliveries of the L60 are scheduled to begin on September 28.
Nio’s shares experienced a brief 3.5% surge in U.S. trading following the announcement. The L60’s final pricing is even lower than previously disclosed. Initially, Nio had stated the SUV would start at 219,900 yuan when the brand was launched in May, compared to Tesla’s Model Y, which begins at 249,900 yuan.
Nio CEO William Li indicated that Onvo could enter the European market as early as next year, although no definitive timeline was provided. The introduction of the lower-priced Onvo brand is expected to help Nio navigate growing tariffs and other obstacles that have posed challenges to its premium lineup in overseas markets, including Europe and the United States. Li clarified that Onvo and Nio target different price segments, minimizing the risk of cannibalization between the two brands.
The competition in China’s electric vehicle sector has become intense, with several manufacturers vying for market share. Geely-backed Zeekr is set to launch its first midsize electric SUV, the Zeekr 7X, starting at 239,900 yuan. Meanwhile, Xpeng has introduced its mass-market Mona brand, with the M03 electric coupe starting at 119,800 yuan. The Mona M03 offers a driving range of 515 kilometers, with a higher-end version featuring a range of 580 kilometers priced at 155,800 yuan. In comparison, Tesla’s lowest-priced model, the Model 3, is listed at 231,900 yuan in China following a price cut earlier this year.
While Chinese EV companies have been making strides overseas, the European Union is considering increasing tariffs on Chinese-made electric vehicles starting in November. This move comes in response to concerns over subsidies provided to Chinese manufacturers. Nio has cooperated with the EU’s investigation but would face a 20.8% duty, compared to 19.9% for Geely and 17.4% for BYD.
Despite these challenges, Nio plans to start deliveries in the United Arab Emirates by the fourth quarter. The company is focusing on its existing European markets while continuing to expand its presence, recently opening a flagship “NIO House” in Amsterdam and deploying power swap stations across Europe.
Nio anticipates monthly deliveries of the L60 to reach 10,000 units in December and up to 20,000 units next year, with a projected vehicle margin of 15%. The Onvo brand aims to have over 200 stores in China by year-end, with more than 100 already open as of early September. Nio is also preparing to launch another lower-priced brand, Firefly, aimed at international markets, starting next year.
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