On May 15, 2024, Ai Tiecheng, Senior Vice President of NIO and President of ONVO, delivered a speech at the press conference of ONVO, NIO’s new sub-brand. On May 15, NIO launched its second brand ONVO and its first model L60.
VCG | Visual China Group | Getty Images
Shanghai—Chinese electric vehicle startup Nioh Chief Executive William Lee told reporters on Thursday that the company was adjusting its global market strategy based on geopolitical developments.
The company will remain focused on China and will stick to its original intention of becoming a global company — “but there will be some changes in our approach,” Li said in Mandarin (translated by CNBC).
Nio launched its low-price brand Onvo on Wednesday with a new L60 SUV that is about $4,000 cheaper than the Tesla Model Y.
“For example, in Europe, we used to use direct sales,” said Li, who founded Nio about 10 years ago.
“But now we have Onvo, and then we have Firefly, a lower (price) entry-level brand. We can enter the global market, and we will have some changes in the process. We can find more local market partners.
This could include local distribution or production, Lee said, describing the overall strategy as “global capabilities, local operations.”
The company is initially focusing on the high-end market and has started selling in parts of Europe.
The international arm of state-owned automaker Guangzhou Automobile Group told CNBC last month that its overseas expansion will also take a more flexible approach, partnering with local factories in some markets or investing directly.
BYD’s overseas expansion relies on local dealers while building factories in certain markets.
Li did not specify when Onvo-branded cars would start being sold outside China.
The Biden administration this week announced a 100% tariff on Chinese electric vehicle imports, and the European Union is considering similar measures. Against this background, tensions in Sino-US relations have recently focused on the field of advanced semiconductors.
Lee reiterated his view that U.S. tariffs are “unreasonable,” especially given the impact on consumers and climate goals.
He called China’s auto import tariffs “reasonable” and said NIO has called on the Chinese government to cancel import tariffs on new energy vehicles. This category includes hybrid vehicles and purely battery-powered vehicles.
Competition in China is fierce
In China, the world’s largest automobile market, sales of new energy vehicles are growing rapidly.
Fierce competition has driven Tesla Other companies have cut prices one after another.
Nio’s Li said Thursday that he expects most of the price war to have passed and that about 10 automakers will eventually lose out in the Chinese market, leaving only about 20 to 30 players. He expects survivors to include global automakers, local Chinese companies and start-ups.
Li insisted that NIO would focus on “stable” prices.
For its lower-priced Onvo brand, the company aims to release a new vehicle every year, including another SUV for large families, with deliveries starting next year, Li said.
He estimated that if Onvo can sell about 20,000 vehicles per month, the brand will have a positive impact on NIO as a whole. The U.S.-listed startup has been losing money.
In addition to investments in research, battery charging and swapping stations, the company operates a range of services, including the Nio House Club, which users of its premium brands can use for free.
Onvo users will not be able to access Nio House, but will be able to take advantage of the parent company’s network of battery chargers and swap stations, Li said.
One of NIO’s strategies is to separate the sales of body and powertrain systems. Customers can choose to pay less upfront for the vehicle and pay for battery service with a monthly subscription.
Li said Onvo’s battery service subscription plan will be released in September. Deliveries of the L60 will begin at this time.
About The Author
