Chinese smart electric vehicle (EV) maker Nio is developing mass-market cars to challenge the likes of Volkswagen and Toyota amid growing demand for battery-powered automobiles in China. The Shanghai-based carmaker is designing compact EVs that will be priced between 100,000 yuan (US$14,808) and 200,000 yuan, according to Chinese technology news site 36kr. While Nio would not comment on the report, two industry officials with knowledge of its strategy confirmed the news. They said a new as yet unnamed brand would be launched to drive Nio’s push into the compact car segment. “The surging use of EVs in China has prompted leading players to expand their product portfolios and vie for a bigger market share,” said Gao Shen, an independent analyst in Shanghai. “More new EVs priced below 200,000 yuan will hit the market because of their affordability as far as most of China’s middle class is concerned.” Lower loan rates help recharge China’s electric-car market The new brand and compact cars marks a shift for Nio, which has targeted the high-end segment with luxury models since its establishment eight years ago. Its existing models, such as the ES8 sport utility vehicle (SUV) and ET7 sedan, all start from more than 300,000 yuan. Moreover, it is – along with Beijing-headquartered Li Auto and Guangzhou-based XPeng – regarded as China’s best response to US carmaker Tesla , which is the runaway leader in China’s premium EV segment. China’s compact car segment is currently dominated by the likes of Volkswagen Lavida, which starts at 99,900 yuan, and the Toyota Corolla, whose entry-level edition sports a price tag of 109,800 yuan. William Li, co-founder and CEO of Nio, said during an earnings call in April that the carmaker would launch a new brand called Alps, which would have new models priced from 200,000 yuan to 300,000 yuan. The mass production of Alps vehicles was expected to start in 2024, he said at the time. The new mass-market brand will be the company’s third brand after its namesake brand and Alps. In the first half of this year, 2.5 million new-energy vehicles (NEVs), which comprise pure electric, plug-in hybrid and fuel-cell cars, were sold in mainland China, representing more than a fifth of the country’s total passenger car sales. Two dead after Nio car falls from third floor during test drive in Shanghai Li Auto received 30,000 pre-orders for its L9 SUV, which is priced at 459,800 yuan and is to be delivered in August, within three days of its launch on June 21. Swiss bank UBS forecast last year that three out of every five new cars hitting the streets in China would be battery powered in 2030. China-focused investment research firm EqualOcean said in a report in November that 1.6 million EVs produced on the mainland in 2021 fell into the category of smart vehicles, accounting for about two-thirds of total EV deliveries nationwide. Smart EVs feature autonomous driving technology, as well as sophisticated in-car entertainment facilities and digital technologies such as voice recognition, augmented reality and virtual reality.