NYSE-listed premium EV maker NIO to launch mass-market brand as more Chinese motorists go electric
- Company posts net loss of 587.2 million yuan for the second quarter, narrowing from a loss of about 1.2 billion yuan a year ago
- ‘It will not be enough for NIO to bolster profitability in the coming decade if it just focuses on expensive cars’: analyst
William Li, the carmaker’s founder and CEO, said a new brand focusing on more affordable models will be launched, but did not disclose any details such as when the first model would hit the market.
“The relationship between Nio and our new mass-market brand will be like that of Audi-Volkswagen and Lexus-Toyota,” Li said at a results briefing on Thursday, adding that a core team tasked with launching the new brand has been assembled.
New York Stock Exchange-listed NIO posted a net loss of 587.2 million yuan (US$90.7 million) for the second quarter ended June 30, narrowing from a loss of about 1.2 billion yuan a year ago.
NIO’s announcement comes amid expectations that EVs will soon become more common on China’s roads. The China Passenger Car Association, for instance, recently forecast that full-year EV sales could more than double to 2.4 million this year. Earlier, Swiss bank UBS said carmakers will be able to achieve margin parity between traditional cars and EVs by 2025, as the cost of batteries comes down.
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Established in 2014, NIO currently sells three premium EV models: the ES6 sport-utility vehicle and the ES8 and EC6 sedans. The ES6 starts at 358,000 yuan, while the ES8 is price between 468,000 yuan and 624,000 yuan. The basic model of the EC6 is priced at 368,000 yuan.
“EVs priced below 200,000 yuan have the largest customer base in China,” said Eric Han, a senior manager with Shanghai-based business advisory firm Suolei. “It will not be enough for NIO to bolster profitability in the coming decade if it just focuses on expensive cars,” he added.
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In January, the EV maker unveiled the ET7, its fourth production model. The new EV’s extended edition will be able to travel about 1,000 kilometres on a single charge. The company expects to deliver the first batch of ET7s, starting at 448,000 yuan, early next year.
“As EV adoption begins to reach a tipping point worldwide, we believe it is imperative to speed up the launch of new products to provide more premium smart EV offerings, with superior holistic services, to the growing user base in the global market,” Li said.