Chinese electric vehicle company Nio launched its lower-priced Onvo brand on Wednesday, May 15, 2024, in Shanghai, China.
CNBC | Evelyn Cheng
BEIJING – Chinese electric vehicle company Nio plans to expand its presence in the Middle East this year, CEO William Lee said on a conference call Thursday, as rivals increase their global presence.
The nearly 10-year-old company will also begin shipping its lowest-priced Firefly brand in the first half of next year, Lee said.
Nio, which recently received funding from investors in the Middle East, A record 20,544 vehicles were delivered. in May.
The U.S.-listed Chinese company, which is operating at a loss, plans to begin offering its products and services in the United Arab Emirates by the end of this year, Li said, according to a FactSet transcript.
Nio is primarily sold in China and parts of Europe, with a focus on the higher-end market. Lee said the brand could break even if monthly sales reach about 30,000 vehicles.
Competitor BYD also made the United Arab Emirates its entry point into the Middle East. In November, the battery and electric vehicle giant said it had opened a showroom in Dubai Festival City as part of cooperation with Al-Futtaim Electric car company.
As competition intensifies in the Chinese electric vehicle market, Nio launched its lower-priced Onvo brand in May. The Onvo L60 SUV, which will begin shipping in September, starts at 219,900 yuan ($30,349). Tesla Model Y costs 249,900 yuan.
Lee said on Thursday that the price of the L60 is for pre-sales only and not the final price.
“We continue to believe Onvo L60 will be a key driver of NIO’s potential outlook in the second half of 2024,” Nomura analysts said on Friday. They rate the stock neutral.
Third car brand Nio
An even cheaper Firefly brand is in the works, according to Nio’s Lee.
On Thursday, he told investors that Firefly would deliver its first vehicle in the first half of next year, priced between 100,000 and 200,000 yuan.
Firefly will use the same sales point as Nio-branded vehicles, Lee said, noting that it will be similar to the sales model used by MINI and BMW.
Part of BYD’s strategy was to launch vehicles and sub-brands for various market segments. electric startup Speng also plans to launch a lower-priced Mona brand this month and begin volume shipments in the third quarter.
Nio said its research and development expenses totaled 2.86 billion yuan in the first quarter, down 6.9% year-on-year.
Operating loss in the first quarter was 5.5% higher than a year earlier at 5.39 billion yuan.
Onvo Store Expansion
Onvo, which has a separate sales channel from Nio, plans to open about 100 stores in China, Li said, adding that each store would require an investment of 1 million to 2 million yuan.
“We also understand that competition in the ONVO segment is tougher than in the NIO segment,” Li said. “In this case we will also find a balance between volume and profit. We will not increase sales at the expense of profits from our vehicles.”
Onvo is expected to break even by selling 20,000 to 30,000 vehicles a month, he said.
The company also plans to spend 200,000 to 300,000 yuan on each of its older battery swap stations to make them compatible with Onvo vehicles, Li said.
Nio’s energy subsidiary is set to receive up to 1.5 billion yuan of new investment from a fund backed by the Chinese city of Wuhan, the company said in late May.