Nio, Tesla’s Chinese rival, has announced a price cut for its new Onvo-branded L60 SUV, intensifying competition in the electric vehicle market. The L60, Onvo’s first car, is now priced at 149,900 Chinese yuan ($21,210) when purchased with a battery subscription starting at 599 yuan per month (approximately $1,000 annually). Alternatively, buyers can opt for a model with both the car and the battery for 206,900 yuan. Deliveries are set to begin on September 28.
Nio’s shares briefly surged by more than 3.5% in U.S. trading after the L60’s price drop announcement. When the Onvo brand was first introduced in May, the L60 was priced at 219,900 yuan, already lower than Tesla’s Model Y, which sells for 249,900 yuan in China.
Nio CEO William Li, in an exclusive interview, hinted at plans to launch Onvo in Europe next year, although no specific timeline was provided. Li emphasized that Onvo is intended to target a different market segment than Nio’s premium vehicles, and he expects no significant overlap in customer bases. Li also noted that Nio’s deliveries have improved since the Onvo brand’s announcement, signaling the new brand’s potential to capture a broader audience.
China’s electric vehicle industry is fiercely competitive, with several companies aiming to challenge Tesla’s market share. Geely-backed Zeekr is set to launch its first midsize electric SUV, the Zeekr 7X, priced at 239,900 yuan, while Xpeng recently introduced its mass-market Mona brand, with the M03 electric coupe starting at 119,800 yuan. Tesla’s cheapest offering in China, the Model 3, costs 231,900 yuan, even after an April price cut.
Chinese electric car manufacturers have increasingly set their sights on expanding overseas, particularly in Europe. However, the European Union is on the verge of increasing tariffs on Chinese-made battery electric vehicles, which could further challenge these automakers. Nio is cooperating with the EU’s investigation into Chinese EV subsidies, and its vehicles will face a 20.8% duty, higher than the tariffs imposed on competitors Geely and BYD.
Nio plans to begin deliveries in the United Arab Emirates during the fourth quarter, according to Li, who shared these details during a recent earnings call. He acknowledged the challenges posed by Europe’s tariffs but noted that Nio is still committed to its existing markets and continues to build infrastructure, such as power swap stations, in Europe. Nio also opened its “Nio House” in Amsterdam earlier this year.
Li expects monthly deliveries of the L60 to reach 10,000 by December, with a goal of 20,000 per month by 2024. The company anticipates a 15% vehicle margin on the Onvo-branded cars and aims to have over 200 stores in China by the end of this year, with more than 100 already open. Additionally, Nio is preparing to launch its even lower-priced Firefly brand internationally next year.