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Nio, the Chinese electric car company, made headlines by revealing its new sub-brand, Onvo, and its first car, the L60 SUV, which is set to be approximately $4,000 cheaper than Tesla’s Model Y. The deliveries for the L60 SUV are expected to begin in September, following the launch event that took place recently. This move marks a significant shift for Nio, which has primarily operated in the premium segment of cars priced around 300,000 yuan (US$41,500) or higher.

Onvo’s L60 SUV comes at a starting price of 219,900 yuan (US$30,439), positioning it as a more affordable alternative to Tesla’s Model Y, priced at 249,900 yuan (US$34,617). Nio CEO William Li expressed his intentions for Onvo to eventually expand its sales overseas, although a specific timeline for this expansion was not provided during an interview with CNBC’s Eunice Yoon. The decision to introduce a lower-priced brand reflects the increasing competition in China’s electric car market, with new entrants like Xiaomi challenging established players like Tesla with competitive pricing.

The Chinese electric car market has seen a surge in competition, with companies like Xiaomi entering the fray with their electric vehicles, such as the SU7 sedan, aimed at competing with Tesla’s offerings. Xiaomi’s entry into the market prompted Tesla to reduce the price of its Model 3 by $2,000, bringing it down to 231,900 yuan (US$32,124). Other Chinese automakers like BYD, known for selling cars in the lower price range, have also started to explore higher-price segments in recent years. Nio’s CEO confirmed that the L60 SUV is utilizing lower-priced batteries from BYD, showcasing the collaboration between different players in the industry.

The rise of Chinese electric vehicle makers has drawn attention globally, leading to new tariffs imposed by the Biden administration on imports of these vehicles to the U.S. Chinese EVs now face a 100% tariff, a move that Nio’s CEO Li criticized as “completely unreasonable.” The impact of these tariffs on consumers and climate goals remains a significant concern, highlighting the broader implications of trade disputes in the electric car industry.

Onvo aims to set a new standard for the family car, focusing on providing a spacious interior, superior shock absorption, and advanced driver-assist technology. The brand’s name, “On Voyage,” symbolizes a journey of happiness for families, while its Chinese name, “Le Dao,” reinforces the concept of togetherness. Onvo’s L60 SUV boasts a competitive driving range on a single charge, comparable to or even exceeding that of Tesla’s Model Y. The integration of Nio’s battery swap and charging stations for Onvo vehicles enhances the accessibility and convenience for customers, showcasing a holistic approach to electric vehicle ownership.

Onvo’s emphasis on driver-assist technology and safety features reflects a broader trend in the electric car industry towards innovation and integration of advanced functionalities. With Tesla’s Full Self-Driving software anticipated to receive approval for rollout in China, the competition in the market is expected to intensify, driving further advancements in autonomous driving capabilities. As Onvo and other Chinese electric car companies continue to challenge established players like Tesla, the industry’s landscape is evolving rapidly, signaling a new era of innovation and competition.

Finance

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