Chinese EVs Nio, Xpeng turn to mass market for growth

105446902 1536773590404nio ob photo 180912 press 3

105446902 1536773590404nio ob photo 180912 press 3

Nio Founder and CEO William Li is seen outside the New York Stock Exchange celebrating his company’s IPO.

Chinese electric car start-ups Nio and Xpeng are targeting the lower-priced segment of the market by introducing new branded cars this year. Nio plans to release an SUV cheaper than Tesla’s Model Y, starting at 249,900 yuan in China.

Initially, Nio and Xpeng catered to the premium market with vehicles costing around $50,000. Now, they are gearing up to compete more directly with local rivals like BYD and Volkswagen by launching mass-market brands.

China’s new energy car market, including battery-only and hybrid vehicles, accounts for over 40% of new passenger cars sold in the country. Despite market price volatility, Li does not anticipate significant adjustments to the main brand’s pricing.

Nio is set to launch its new brand called Onvo in mid-May, focusing on offering affordable EV options for families. Xpeng, on the other hand, plans to introduce its new sub-brand Mona in the next few months at prices below 150,000 yuan.

Both companies aim to bring differentiated technology to the mass market by leveraging scale, technology, and cost control capabilities. Xpeng highlights its driver-assist software as a selling point, positioning itself against Tesla in the Chinese market.

While Nio targets a slightly higher price range for its new brand, Xpeng aims to appeal to a broader consumer base with more affordable options. BYD, a key player in the Chinese electric car market, has diversified its product offerings to include premium and luxury cars in addition to its success in the lower end of the mass market.

Overall, the shift towards more affordable electric vehicles signals a competitive landscape in China’s rapidly growing EV market.

Chinese electric car start-ups Nio and Xpeng are shifting their focus to the lower-priced segment of the market with plans to release newly branded cars this year. Both companies are looking to compete with local rival BYD and German carmaker Volkswagen in the intense price war in China’s new energy car market, which now accounts for over 40% of new passenger cars sold in the country.

Nio’s CEO William Li revealed that the company’s first mass market car, an SUV cheaper than Tesla’s Model Y, will be launched in mid-May under the new brand name Onvo or “Le Dao.” The company aims to target families as the primary consumer segment for this new car. Xpeng, on the other hand, plans to launch its new sub-brand Mona in the next two to three months with cars priced below 150,000 yuan, aiming to bring differentiated technology to the mass market.

Despite undercutting Tesla’s Model Y in price, Nio’s new brand will be priced around $30,000, not as low as BYD’s offerings in the lower end of the mass market. BYD, which has found success in the lower-priced segment, is launching a new hybrid-powered car in the 120,000 to 150,000 yuan price range in the second quarter along with several other new cars planned for the year.

Both Nio and Xpeng are gearing up to compete in the mass market segment, leveraging technology, scale, and cost control to reach a broader consumer base. With the competition heating up in China’s electric car market, these companies are looking to diversify their product offerings and capture a larger share of the market.

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