- Chinese electric car start-ups Nio and Xpeng are turning to a lower-priced segment of the market with plans to release newly branded cars this year.
- Nio’s first such mass-market car will be an SUV cheaper than Tesla’s Model Y, CEO William Li told CNBC’s Eunice Yoon on Thursday.
- Xpeng sells its cars in a slightly lower price range than Nio, Vice Chairman and Co-President Brian Gu said on Thursday.
Chinese electric vehicle start-ups Nio and Xpeng intend to launch newly branded cars this year, targeting a less expensive market segment.
About newly branded cars
CEO William Li of Nio said to CNBC’s Eunice Yoon on Thursday that the company’s first mass-market vehicle will be an SUV that costs less than Tesla’s Model Y. In China, the Tesla SUV is priced at 249,900 yuan ($35,197).
When it first launched approximately ten years ago, U.S.-listed Nio, like many early players in China’s electric car market, aimed for the luxury segment. Its cars, which can cost $50,000 or more, come with extra features for customers like Nio clubhouses and a network of locations for battery swapping and charging.
Nio intends to launch its new brand, Onvo, or “Le Dao” in Chinese, in the middle of May. The company says the name is intended to symbolize happy family moments shared by the target consumer segment.
Vice Chairman and Co-President Brian Gu told CNBC on Thursday that Xpeng, which offers its vehicles at a slightly lower price point than Nio, intends to introduce its new sub-brand Mona in the next two to three months.
According to Gu, the new cars will retail for less than 150,000 yuan ($20,700), which is less than what Nio has set out to sell. Xpeng announced last summer that it would create a new mass-market brand for that price range in conjunction with Didi, the operator of the ride-hailing app.
One of Xpeng’s main selling points in China is its driver-assist software. The nation does not currently have access to Tesla’s equivalent full self-drive software.
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China’s new energy car market
The launch of the new automobiles coincides with a fierce pricing war for battery-only and hybrid vehicles in China’s new energy car market. These days, well over 40% of newly sold passenger cars in the nation are of this type.
In China, only two or three brands presently control about 80% of the mass market, whereas at least a dozen brands compete in the premium segment.
For under 250,000 yuan, Tesla’s Model Y is the best-selling all-battery electric SUV in China, per Autohome data for the first quarter of this year.
