Chinese electric car company Nio launched its lower-cost Onvo brand on Wednesday, May 15, 2024, in Shanghai, China.
CNBC | Evelyn Cheng
HEFEI, China — Another Chinese electric car is looking to undercut the competition Teslawith a higher discount.
Onvo, the budget brand launched by premium electric carmaker Nioannounced that its first car, the L60 SUV, would start at 149,900 Chinese yuan ($21,210) with the purchase of battery services via a monthly subscription, starting at 599 yuan. That's the equivalent of just over $1,000 a year to “rent” the battery.
A model with the battery and the car starts at 206,900 yuan. Deliveries begin on September 28.
Nio shares briefly rose more than 3.5% on the U.S. stock exchange on Thursday after the launch of the Onvo L60.
When Nio launched its Onvo brand in May, the company said the L60 would retail for 219,900 yuan, compared to TeslaModel Y for 249,900 yuan.
Yellowish-supported Sea asparagus will launch its first mid-size electric SUV, the Zeekr 7X, in China on September 20, starting at 239,900 yuan.
Xpeng In late August, its mass-market brand Mona announced it would begin selling its M03 electric coupe in China. The base version starts at 119,800 yuan, with a range of 515 kilometers (320 miles) and some parking assistance features.
A version of the Mona M03 with the more advanced 'Max' driver assistance systems and a range of 580 kilometers will cost 155,800 yuan.
For comparison, Tesla's cheapest car, the Model 3, costs 231,900 yuan in China, after a price cut in April.
Chinese electric car companies have been gradually expanding overseas, often starting in Europe. But the European Union is nearing the end of a process that would have raised tariffs on imported Chinese battery-electric cars from early November. The bloc last year launched an investigation into the use of subsidies by Chinese EV makers.
Nio cooperated with the EU investigation but was not sampled, meaning its cars would be subject to a 20.8% tariff, according to a July announcement by the European Commission. That's higher than the 19.9% tariffs planned for Geely cars and 17.4% for BYDs.
Nio plans to begin deliveries in the United Arab Emirates in the fourth quarter, CEO William Li told investors during an earnings presentation on Sept. 5.
“The current tariffs in Europe make it more expensive to sell or export cars from China to Europe,” Li said, according to a FactSet transcript.
“So we're going to focus on the five existing European markets that we've already started. We also know that it's going to take longer to establish NIO as such a premium brand in the European market, and we're very patient with that.”
“But that doesn’t mean we’ve stopped our operations there in the meantime,” Li said. “We just opened our NIO house in Amsterdam at the beginning of this year, and we’re still installing and deploying our power swap stations in Europe.”
He expects the L60 to reach 10,000 monthly deliveries in December and 20,000 vehicle deliveries per month next year. He expects a 15% vehicle margin on the new Onvo-branded cars.
The brand aims to have more than 200 stores in China by the end of this year, with more than 100 opened in early September.
Li said during the earnings presentation that Onvo and Firefly, an even lower-priced brand that will begin deliveries next year, are planning to release vehicles for the international market.
— CNBC's Sonia Heng contributed to this report.
