Nio founder and CEO William Li poses outside the New York Stock Exchange to celebrate his company's IPO.
Photo: NYSE
BEIJING – Chinese electric car start-ups Nio And Xpeng are targeting a lower priced segment of the market with plans to launch new branded cars this year.
Nio's first mass-market car will be a cheaper than SUV Tesla's 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 to China's electric car market, US-listed Nio targeted the premium market when it launched about a decade ago. The 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 put the companies in more direct competition with local rivals BYD and German car manufacturer Volkswagen.
The new cars come amid an intense price war in China's new energy car market, which includes all-battery and hybrid vehicles. Such cars now account for more than 40% of new passenger cars sold in the country.
Li said he does not expect the main brand to adjust prices significantly, although he does expect price volatility in the market to continue for a while.
Nio plans a mid-May launch for its new brand, called Onvo or 'Le Dao' in Chinese, a name the company says is intended to reflect families – its target segment – having a happy time together.
Xpeng, which sells its cars at a slightly lower price point than Nio, plans to launch its new sub-brand Mona in the next two or three months, vice chairman and co-president Brian Gu told CNBC on Thursday.
Gu said the new cars would sell for less than 150,000 yuan ($20,700), which is lower than the price range Nio is targeting. Last summer, Xpeng said it would develop a new mass-market brand at that price point through a strategic partnership with ride-hailing app operator Didi.
“The reason we are ready to tackle that segment is that we believe that with scale, with technology and with cost control we can make a difference[d] technology to the mass market,” Gu said, noting that in the past, only the premium market could benefit from high-end technology.
Xpeng has made its driver assistance software one of its selling points in China. Tesla's similar software for full self-driving cars is not yet available in the country.
Gu said in a briefing with reporters that Xpeng would differentiate the technology available to the mass-market brand from existing ones.
He also pointed out that there are at least a dozen brands competing in the premium segment, while only two or three brands currently account for about 80% of the mass market in China.
Tesla's Model Y is the best-selling pure battery electric SUV in China, priced below 250,000 yuan, according to Autohome data for the first quarter of the year.
Despite undermining the Model Y, Li said the new brand's first car will cost about US$30,000 (213,000 yuan) – not as low as BYD.
Chinese battery and electric car giant BYD has found most of its success at the lower end of the mass market. Over the past year, it has launched premium and luxury cars under new brands, expanding the company's product range from less than 100,000 yuan to more than 1 million yuan.
Among the many new cars planned for this year, BYD said Thursday it will launch a new hybrid car in the second quarter with a price range of 120,000 to 150,000 yuan.
