His statements quash speculation that the premium EV builder would adjust its pricing strategy to adapt to changing market conditions following the debut of the new brand.
Onvo vehicles adopt Nio’s proprietary battery swap technology, which allows owners to quickly exchange a spent battery pack for a fully charged one.
The first Onvo model, the L60 SUV, starts at 219,900 yuan (US$30,454), undercutting the basic edition of Tesla’s Shanghai-made Model Y by 30,000 yuan, or 12 per cent.
The car has a driving range of 555km, equal to the Model Y’s 554km.
The new brand will make a positive contribution to the company’s profitability when its monthly deliveries top 20,000 units, Li said. Nio plans to begin mass production and delivery of the L60 to mainland customers in September.
With its Chinese name, Ledao, translating to “happiness on a journey”, the new brand is built for mainstream Chinese consumers and aims to create an enjoyable driving experience for families, the company said.
Currently, all cars under Nio’s namesake brand are priced above 300,000 yuan and compete against the likes of BMW’s X5 and Audi’s Q7.
China’s EV sector, one of the main drivers of the economy, is expected to see sales growth of 20 per cent this year, compared with 37 per cent in 2023, according to a forecast by Fitch Ratings in November.
“The L60 appears to be attractive to middle-income consumers based on its current price,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “But price competition on the market may cause it to lose market share when its rivals slash prices to retain their market share.”
The overall Chinese EV industry could turn unprofitable if BYD were to offer another price reduction of 10,300 yuan per unit, or 7 per cent of the company’s average selling price for its vehicles, Goldman said.
