EV start-ups Nio, Xpeng pin hopes on new, affordable models to boost sales as China’s budget-conscious consumers shift away from premium cars

They will have to convince customers that their electric cars provide value for money if they want to catch up with rivals like Tesla, say analysts

‘Car buyers are increasingly budget-cautious as worries about lower income and job security weigh on them,’ says vehicle sales manager

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An XPeng G9 electric vehicle at the Shanghai Auto Show on April 24, 2023. Xpeng slashing the prices of some of its models by up to 13 per cent in mid-January. Photo: Bloomberg

Published: 8:42pm, 13 Jun 2023

Two of China’s top electric vehicle (EV) start-ups, Nio and Xpeng, are pinning their hopes on new, less expensive models as consumers tighten their belts amid economic uncertainty and move away from the premium end of the market.

They will have to convince customers and investors that their intelligent electric cars provide value for money if they want to catch up with rivals like Tesla and Li Auto, according to analysts.

“Car buyers are increasingly budget-cautious as worries about lower income and job security weigh on them,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Nio and Xpeng should give priority to the affordability of their products to assess whether the prices they offer are attractive to potential customers.”

Guangzhou-based XPeng began taking orders for its G6 sport-utility vehicle (SUV) last Thursday, which aims to take on Tesla’s Model Y. Due to be delivered to customers next month, the G6 starts from 225,000 yuan (US$31,464), compared to the 263,900 yuan price tag for the Model Y’s entry level version.

The company said it received more than 25,000 orders within 72 hours of the presale period starting.

Shanghai-headquartered Nio will launch its ET5 Touring, a compact executive sedan, this Thursday and begin distributing the cars, which start at 298,000 yuan, to buyers the next day.