Chinese electric vehicle company Nio launched its lower-priced Onvo brand on Wednesday, May 15, 2024, in Shanghai, China.
CNBC | Evelyn Cheng
SHANGHAI – Chinese electric vehicle manufacturing company Nio reported Wednesday that the first vehicle from the new, cheaper Onvo brand will be about $4,000 cheaper than Tesla comparable model Y.
Deliveries of Onvo’s first vehicle, the L60 SUV, will begin in September, the company said. Pre-sales began after the presentation on Wednesday.
Nio CEO William Lee said he expects Onvo to start selling its cars overseas at some point, but did not specify when, according to an interview with CNBC’s Eunice Yoon.
Since its launch about 10 years ago, Nio has focused on the premium segment of cars priced around 300,000 yuan ($41,500) or above. The company has since expanded into Europe, but its monthly shipments to China overall remain modest compared to competitors.
Onvo’s L60 starts at 219,900 yuan ($30,439) compared to 249,900 yuan ($34,617) for the Model Y. Elon Musk’s electric SUV has been one of the best-selling battery-powered electric vehicles in China.
Fierce competition in China’s electric vehicle market has attracted new entrants and prompted many companies to cut prices.
Smartphone company Xiaomi entered the EV market in late March with its SU7 sedan to compete with the Tesla Model 3, but at a price that was also about $4,000 cheaper.
According to Tesla’s Chinese website, the Model 3’s price has since dropped by about $2,000 to 231,900 yuan ($32,124). On Wednesday, Xiaomi said it had delivered 10,000 SU7 units.
BID, which sold more vehicles than Elon Musk’s automaker last year, including hybrids, mainly sells cars priced at 100,000 yuan ($13,851) or lower. In the last few years, BYD has begun to expand into higher price segments.
Nio CEO Lee confirmed to CNBC that the L60 uses cheaper batteries from BYD.
Global competition from Chinese electric vehicle makers has also prompted the Biden administration to impose tough new tariffs on U.S. vehicle imports. Chinese electric vehicles will be subject to a 100% tariff, the administration announced on Tuesday.
When asked about the new fees, Lee called them “completely unreasonable,” according to a CNBC translation from Mandarin to English. Lee also noted the impact on consumers and climate goals.
A ‘new standard’ family car that can compete with Tesla
Onvo aims to set a “new standard” for the family car, Alan Ai, president of the Nio sub-brand, said at a presentation on Wednesday in Mandarin translated by CNBC.
The brand’s name means “On Voyage” and its Chinese name “Le Dao” is meant to evoke a family happily spending time together.
During his presentation, Ai made many comparisons to the Model Y and other cars.
He said the L60’s interior is more spacious than the Tesla Model Y and Toyota Rav4. He also said the new Onvo has better damping and a tighter figure-eight than its competitors.
The Onvo’s claimed range per charge is at least as good as or even better than the Model Y, depending on the version.
As a sub-brand, Onvo cars can access many of Nio’s battery swapping and charging stations, Ai said.
Ai also showed videos of Onvo models using driver-assist technology to navigate country roads and city streets.
Tesla’s Full Self-Driving driver assistance software is not yet available in China, but Beijing is expected to be close to approving its implementation.