Chinese electric car company Nio launched its lower-cost brand Onvo on Wednesday, May 15, 2024, in Shanghai, China.
CNBC | Evelyn Cheng
BEIJING – Chinese electric car manufacturer Nio plans to expand into the Middle East this year, CEO William Li said in an earnings call on Thursday, at a time when rivals have expanded their global presence.
The nearly decade-old company will also start shipping its lowest-cost brand Firefly in the first half of next year, Li said.
Nio, which recently received funding from Middle East investors, posted a record delivery of 20,544 vehicles in May.
The loss-making U.S.-listed Chinese company plans to offer its products and services in the United Arab Emirates later this year, Li said, according to a FactSet transcript.
Nio sells primarily in China and parts of Europe, with a focus on the high-end market. Li said the brand could break even when monthly sales reach about 30,000 vehicles.
WORLD rival has also made the United Arab Emirates its entry point into the Middle East. The battery and electric car giant announced in November that it had opened a showroom at Dubai Festival City as part of a collaboration with Al-Futtaim Electric Mobility Company.
As competition heats up in China’s electric car market, Nio launched a cheaper brand called Onvo in May. The Onvo L60 SUV, with deliveries scheduled to begin in September, starts at 219,900 yuan ($30,349). Tesla Model Y costs 249,900 yuan.
Li said Thursday that the price of the L60 is only for pre-sales and is not the final price.
“We continue to believe that the Onvo L60 will be the key factor affecting NIO’s potential prospects in the second half of 2024,” Nomura analysts said in a note on Friday. You rate the stock as neutral.
Nio’s third car brand
An even cheaper brand, Firefly, is also in the works, Nio’s Li said.
He told investors on Thursday that Firefly will deliver its first car in the first half of next year, priced between 100,000 and 200,000 yuan.
Firefly will have the same sales outlet as Nio-branded cars, Li said, pointing out that it would be similar to the sales model of MINI and BMW.
Part of BYD’s strategy was to release vehicles and sub-brands for different market segments. EV start Xpeng also plans to launch a cheaper brand, Mona, this month and begin mass delivery in the third quarter.
Nio said its research and development expenses were 2.86 billion yuan in the first quarter, down 6.9% from the same period last year.
Operating loss of 5.39 billion yuan in the first quarter was 5.5% higher than a year earlier.
Expansion of the Onvo store
Onvo, which has a separate sales channel from Nio, plans to open about 100 stores in China, Li said. Adding each location would require an investment of about 1 million to 2 million yuan.
“We also know that the competition in the ONVO segment is more intense than in NIO,” said Li. “Then we will also find a balance between volume and margin. We will not increase sales volume at the expense of our vehicle margin.”
He said Onvo will break even with around 20,000 to 30,000 vehicle sales per month.
The company also plans to spend about 200,000 to 300,000 yuan on each of its older battery swapping stations to make them compatible with Onvo vehicles, Li said.
Nio’s energy subsidiary is set to receive up to 1.5 billion yuan in new investments from a fund backed by the Chinese city of Wuhan, the company announced in late May.
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2024-06-07 03:57:22
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