Chinese electric vehicle maker NIO launched its low-cost brand Onvo in Shanghai, China on Wednesday, May 15, 2024.
CNBC | Evelyn Chen
HEFEI, China — China’s electric cars are about to drop in price again. Teslaand even bigger discounts will be applied.
Onbo, a low-cost brand launched by a luxury electric car manufacturer Nioannounced that its first passenger vehicle, the L60 SUV, will be priced from 149,900 yuan ($21,210) with a monthly subscription of 599 yuan, the equivalent of just over $1,000 a year to “rent” a battery.
The price for the model including the battery and the body starts at 206,900 yuan, and deliveries are scheduled to start from September 28th.
Following the launch of the Onvo L60, NIO’s shares rose more than 3.5% in U.S. trading on Thursday.
When Nio launched its Onvo brand in May, the company announced a selling price of 219,900 yuan for the L60. TeslaThe Model Y is priced at 249,900 yuan.
Geely-backup Zeekle The company plans to launch its first mid-size electric SUV, the Zeekr 7X, in China on September 20, with prices starting at 239,900 yuan.
Scheppen In late August, the company announced it would sell the M03 electric coupe under its mass-market Mona brand in China, with prices starting at 119,800 yuan for the base version, which has a range of 515 kilometers (320 miles) and some parking-assistance features.
The Mona M03 version, which comes with more advanced “Max” driving assistance features and has a driving range of 580 km, will be priced at 155,800 yuan.
By comparison, Tesla’s cheapest car, the Model 3, costs 231,900 yuan in China after a price cut in April.
Chinese electric vehicle makers have been gradually expanding overseas, starting with Europe, but the European Union is almost done with the process of raising import tariffs on Chinese-made battery electric vehicles from early November. The EU launched an investigation last year into Chinese EV makers’ use of subsidies.
Nio cooperated with the EU investigation but no samples were taken, meaning that its cars are subject to 20.8% tariffs as of the European Commission’s July announcement, higher than the 19.9% tariffs planned for Geely cars and 17.4% for BYD.
Nio Chief Executive Officer William Li told investors during an earnings call on Sept. 5 that the company plans to begin deliveries in the United Arab Emirates in the fourth quarter.
“Right now, because of the tariffs in Europe, it has become more expensive to sell or export cars from China to Europe,” Li said, according to a transcript of the conversation compiled by FactSet.
“So we will focus on the existing five European markets where we have already started. We also know that it takes longer to establish a premium brand like NIO in the European market and we are being very patient with that.”
“But for the time being, that doesn’t mean we’ve stopped our activities there,” Li said. “We just opened the NIO House in Amsterdam earlier this year, and we’re still installing and rolling out power exchange stations across Europe.”
He expects monthly deliveries of the L60 to hit 10,000 in December and 20,000 per month next year. He expects a vehicle profit margin of 15% for new Ombo-branded vehicles.
The brand aims to have more than 200 stores in China by the end of the year, and as of early September had already opened more than 100 stores.
On the earnings conference call, Li said Ombo and Firefly, a lower-cost brand that is due to start deliveries next year, were considering launching vehicles for international markets.
—CNBC’s Sonia Heng contributed to this report.
