Chinese electric vehicle company Nio launched its low-cost brand Onvo on Wednesday, May 15, 2024 in Shanghai, China.
CNBC | Evelyn Cheng
Beijing – China Electric Vehicle Company Nioh Chief Executive William Lee said on an earnings call Thursday that the company plans to expand into the Middle East this year at a time when rivals have been expanding their global footprints.
The nearly 10-year-old company will also start selling its lowest-cost brand, Firefly, in the first half of next year, Li said.
NIO recently received financing from Middle Eastern investors, Delivery volume hit a record high of 20,544 vehicles in May.
The U.S.-listed Chinese company has been losing money and plans to start offering products and services in the United Arab Emirates by the end of this year, Li said, according to FactSet records.
Nio is mainly sold in China and parts of Europe, and focuses on the high-end market. Li said that if monthly sales reach about 30,000 vehicles, the brand will be able to break even between profits and losses.
world rivals It also uses the United Arab Emirates as an entry point into the Middle East. The battery and electric vehicle giant said in November it was opening a showroom in Dubai Festival City as part of the plan. Cooperation with Al-Futtaim Electric car company.
As competition in China’s electric vehicle market intensifies, Nio launched a low-price brand called Onvo in May. Deliveries of the Onvo L60 SUV are scheduled to begin in September, with prices starting at 219,900 yuan ($30,349). Tesla Model Y 249,900 yuan.
Li said on Thursday that the price of the L60 is only a pre-sale price, not the final price.
“We continue to believe Onvo L60 will be a key factor affecting NIO’s potential 2H24 outlook,” Nomura analysts said in a note on Friday. They have a neutral rating on the stock.
NIO’s third car brand
A lower-priced brand, Firefly, is also in development, NIO’s Li said.
He told investors on Thursday that Firefly will deliver its first vehicle in the first half of next year, priced between 100,000 yuan and 200,000 yuan.
Firefly will share the same sales points with NIO brand cars, Li said, noting that it will be similar to the sales model used by MINI and BMW.
Part of BYD’s strategy is to launch vehicles and sub-brands targeting different market segments. Electric car starts Xpeng There are also plans to launch lower-priced brand Mona this month, with mass deliveries starting in the third quarter.
NIO said its research and development expenses in the first quarter were 2.86 billion yuan, a year-on-year decrease of 6.9%.
Operating loss in the first quarter was 5.39 billion yuan, an annual increase of 5.5%.
Onvo store expansion
Li said Onvo and Nio have independent sales channels and plan to open about 100 stores in China, with each store requiring an investment of about 1 million to 2 million yuan.
“We also understand that the competition in ONVO’s market segment is more intense than that of NIO,” Li said. “That way, we’ll also strike a balance between volume and profit. We won’t increase sales at the expense of vehicle profits.”
Onvo expects to sell about 20,000 to 30,000 vehicles per month and break even, he said.
The company also plans to spend about 200,000 yuan to 300,000 yuan for each old employee. Li said the battery swap station makes them compatible with Onvo vehicles.
Nio said in late May that its power unit would receive up to 1.5 billion yuan in new investment from a fund backed by the Chinese city of Wuhan.
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