Nio to Launch One New Onvo Model Annually, Aiming to Rival Gasoline Vehicles


5/17/20242 min read

Chinese electric vehicle (EV) maker Nio has announced an ambitious expansion under its new Onvo brand, committing to launch one new model each year. This initiative targets the family car market with competitively priced models designed to rival traditional gasoline vehicles.

The announcement comes on the heels of unveiling the Onvo L60 SUV, which starts at 219,900 yuan (approximately $30,476). This price point is 12% lower than Tesla’s Model Y, which begins at 249,900 yuan in China. Nio also revealed plans for a second Onvo model aimed at larger families, signaling its focus on expanding market appeal.

Nio’s Chief Executive, William Li, noted that China's auto industry, with its 110 brands, has already seen significant consolidation, narrowing down to 20-30 active players. He anticipates this consolidation will continue, albeit at a moderate pace.

The EV market in China, the largest in the world, faces challenges such as thin profit margins and slowing sales due to a prolonged price war and declining consumer demand. Many companies are now exploring international markets to sustain growth. Nio, with a market share of about 3% of China’s overall EV market by volume, is among the smaller players striving for profitability, focusing on cost reduction measures to remain viable.

The Onvo L60, designed with safety and comfort in mind, deviates from the high-performance focus common in many EV models. This strategic choice aims to attract buyers seeking practical family cars, reducing costs related to high-performance electric motors. Alan Ai, president of Onvo, emphasized that the target demographic prioritizes affordability in insurance and maintenance over high-speed capabilities.

In a significant development, Li expects Nio's battery-swapping services to generate $10 billion annually once its user base expands to 50 million units, a hundredfold increase from the current half a million units. "That's why we believe battery swapping is worth our long-term investments," Li stated, announcing plans to add 1,000 more battery-swapping stations this year, supplementing the existing 2,415 stations.

Since late last year, Nio has partnered with at least six Chinese EV makers, including Geely Holding Group, which owns eight car brands such as Zeekr and Volvo, as well as Guangzhou Automobile Group and Changan Automobile, to allow access to its battery-swapping stations.

Despite its heavy investments in EV infrastructure, which have raised concerns about financial sustainability, Nio plans to continue this investment, hoping to monetize these services through an increased user base, enhancing overall profitability.

Nio’s commitment to expanding its lineup with the Onvo brand and maintaining a competitive pricing strategy reflects its effort to navigate the challenges of the crowded Chinese auto market while targeting sustained growth and profitability.