Chinese electric vehicle company Nio launched its low-cost brand Onvo on Wednesday, May 15, 2024 in Shanghai, China.

CNBC | Evelyn Cheng

Shanghai—China Electric Vehicle Company Nioh Onvo revealed Wednesday that the first car from its new low-price brand Onvo will be about $4,000 cheaper Tesla’s Similar Model Y.

Deliveries of Onvo’s first car, the L60 SUV, will begin in September, the company said. Pre-sale begins after Wednesday’s launch event.

According to an interview with CNBC’s Eunice Yoon, NIO CEO William Li said he expects Onvo to start selling its cars overseas at some point, but did not specify when.

Since its launch about 10 years ago, Nio has focused on the high-end car market priced at 300,000 yuan ($41,500) or more. The company has since expanded into Europe, but its monthly deliveries in China remain generally lower compared with competitors.

Onvo’s L60 starts at 219,900 yuan ($30,439), while the Model Y starts at 249,900 yuan ($34,617). Elon Musk’s electric SUV has been one of the best-selling pure battery-powered electric vehicles in China.

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Fierce competition in China’s electric vehicle market has attracted new entrants and prompted many companies to cut prices.

Smartphone Company Millet At the end of March, its SU7 sedan entered the electric vehicle market, competing with Tesla’s Model 3 and priced about $4,000 cheaper.

According to Tesla’s China website, the price of the Model 3 has been reduced by about $2,000 to 231,900 yuan ($32,124). Xiaomi said on Wednesday it had delivered 10,000 SU7 units.

BYDLast year, when including hybrids, the company sold more cars than Elon Musk’s automaker, selling mostly cars worth 100,000 yuan ($13,851) or less. Over the past few years, BYD has begun expanding into higher-priced segments.

NIO CEO Li confirmed to CNBC that the L60 uses low-priced batteries from BYD.

Global competition from Chinese electric vehicle manufacturers has also prompted the Biden administration to impose tough new tariffs on cars imported into the United States, with the U.S. government announcing on Tuesday that Chinese electric vehicles would be subject to 100% tariffs.

When asked about the new tax measures, Li called them “completely unreasonable,” according to CNBC’s Chinese-English translation. Lee also noted the impact on consumers and climate goals.

The “new standard” family car to compete with Tesla

Alan Ai, president of NIO’s sub-brand, said at a press conference in Mandarin on Wednesday that Onvo aims to set “new standards” for family cars.

The brand’s name stands for “On Voyage”, while its Chinese name “Ledao” means the happy time a family spends together.

Ai Weiwei made several comparisons between the Model Y and other cars during his speech.

He said the L60’s interior space is more spacious than Tesla’s Model Y and Toyota’s Rav4. He also said that Onvo’s new car has better shock absorption and a more compact figure-eight shape than its competitors.

Onvo’s advertised range on a single charge is at least as far as the Model Y, if not more, depending on the version.

As a sub-brand, Onvo vehicles have access to many Ai Weiwei said NIO’s battery swapping and charging stations.

Ai Weiwei also showed videos of Onvo models driving on rural roads and city streets using driver assistance technology.

Tesla’s driving assistance software “Full Self-Driving” has not yet been launched in China, but Beijing is widely expected to approve its launch soon.

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