Nio, the Chinese electric car company, launched its lower-cost brand Onvo in Shanghai on May 15, 2024. The first car for this brand, the L60 SUV, is priced at approximately $4,000 cheaper than Tesla’s comparable Model Y. Nio CEO William Li mentioned that Onvo may eventually start selling its cars overseas, although no specific timeline was provided. Nio has primarily focused on the premium segment of cars, priced at around $41,500 or higher. While the company has expanded to Europe, its monthly deliveries in China have been relatively modest compared to its competitors.
The Onvo L60 starts at $30,439, while Tesla’s Model Y starts at $34,617. The Model Y has been a popular choice among Chinese consumers in the pure battery-powered electric car market. To keep up with the fierce competition in China’s electric car market, many companies have been cutting prices. In late March, smartphone company Xiaomi entered the electric car market with its SU7 sedan, which also undercut the price of Tesla’s Model 3 by around $4,000. As a result, Tesla reduced the price of the Model 3 by approximately $2,000. Xiaomi reported delivering 10,000 SU7 vehicles.
BYD, which sold more cars than Tesla in 2023 when including hybrids, mainly sells cars priced at $13,851 or below. However, BYD has been expanding into higher-price segments in recent years. Nio CEO Li confirmed that the Onvo L60 is using lower-priced batteries from BYD.
The global competition from Chinese electric-vehicle makers has led to new tariffs imposed by the Biden administration on imports of these vehicles to the U.S. Chinese EVs will now be subjected to a 100% tariff. When asked about these tariffs, Nio CEO Li criticized them as “completely unreasonable” and highlighted their impact on consumers and climate goals.
Onvo aims to set a “new standard” for the family car, according to Alan Ai, the president of the Nio sub-brand. The interior of the Onvo L60 is claimed to be more spacious than that of Tesla’s Model Y and Toyota’s Rav4. It also boasts better shock absorption and superior maneuverability compared to its competitors. The driving range of Onvo’s L60 is advertised to be at least as far as, if not further than, the Model Y. As a sub-brand, Onvo vehicles can access Nio’s battery swap and charging stations. Videos were shown during the launch event, showcasing Onvo models using driver-assist technology to navigate through different types of roads.
In summary, Nio’s new lower-cost brand, Onvo, aims to compete with Tesla in the Chinese electric car market. By offering a more affordable option, Nio hopes to attract a wider range of consumers. The launch of Onvo’s L60 SUV comes at a time when competition in the electric car market is intensifying, leading to price cuts from various manufacturers. However, Nio CEO Li expressed dissatisfaction with the new tariffs imposed by the U.S., emphasizing their negative impact on consumers and climate goals. With its focus on setting a new standard for the family car, Onvo aims to provide a spacious and technologically advanced driving experience comparable to its competitors.
