Nio founder and CEO William Li poses in front of the New York Stock Exchange to celebrate his company’s IPO.
Photo: NYSE
BEIJING – Chinese electric car start-ups Nio And Xpeng are turning to a cheaper market segment and plan to launch new brand cars this year.
Nio’s first such mass-market car will be an SUV that is cheaper than Tesla“The Model Y,” CEO William Li told CNBC’s Eunice Yoon on Thursday. The Tesla SUV starts at 249,900 yuan ($35,197) in China.
Like many early entrants in China’s electric car market, U.S.-listed Nio targeted the premium market when it launched about a decade ago. Its vehicles can cost around $50,000 or more and offer buyers additional services such as Nio clubhouses and a network of battery charging and swapping stations.
Nio and Xpeng’s plans to launch mass-market brands bring the companies into more direct competition with local rivals BYD and German automobile manufacturer Volkswagen.
The new cars come amid an intense price war in China’s new energy car market, which exclusively includes battery and hybrid-powered vehicles. Such cars now account for well over 40% of new cars sold in the country.
Li said he doesn’t expect the main brand to adjust prices significantly, but expects price volatility in the market to continue for a while.
Nio plans to launch its new brand, called “Onvo” or “Le Dao” in Chinese, in mid-May. According to the company, the name is intended to reflect families – the target customer segment – who spend happy time together.
Xpeng, which sells its cars in a slightly lower price range than Nio, plans to launch its new sub-brand Mona in the next two or three months, vice president and co-president Brian Gu told CNBC on Thursday.
Gu said the new cars will sell for less than 150,000 yuan ($20,700), which is below Nio’s target price range. Last summer, Xpeng announced it would develop a new mass-market brand for this price range through a strategic partnership with ride-hailing app operator Didi.
“The reason we are ready to tackle this segment is because we believe we have the ability to make a difference through scale, technology and cost control.”[d] “To bring technology to the mass market,” Gu said, pointing out that in the past, only the premium market could enjoy high-quality technology.
Xpeng has made its driver assistance software one of its selling points in China. Tesla’s comparable software for fully automated vehicles is not yet available in the country.
Gu said in a briefing with reporters that Xpeng will differentiate the technology available for the mass-market brand from the existing one.
He also pointed out that at least a dozen brands compete in the premium segment, while in China currently only two or three brands account for about 80% of the mass market.
According to Autohome data for the first quarter of the year, Tesla’s Model Y is the best-selling all-battery electric SUV in China, priced under 250,000 yuan.
Despite underselling the Model Y, Li said the new brand’s first car will cost around $30,000 (213,000 yuan) – not as cheap as BYD.
Chinese battery and electric car giant BYD has found its greatest success at the lower end of the mass market. Over the past year, the company has launched premium and luxury cars under new brands, making the company’s product offerings range from under 100,000 yuan to over 1 million yuan.
In addition to several new cars planned for this year, BYD said on Thursday that it will launch a new hybrid-powered car in the second quarter, with a price range of 120,000 to 150,000 yuan.
Source link
2024-04-26 09:59:20
www.cnbc.com
