Nio (NIO) on Wednesday launched the Onvo L60 EV, which aims squarely at the Tesla (TSLA) Model Y while targeting China’s mass market for growth. Nio stock sank as U.S.-China tensions resurfaced. Tesla stock also fell.
Nio Onvo L60 For The Masses
The Onvo L60 SUV will start from RMB 219,900 ($30,440), 12% below the Model Y’s starting price of RMB 249,900. Nio plans to start deliveries in September.
The new, more affordable Onvo sub-brand comes 10 years after Nio’s founding. Nio in May rolled out its 500,000th electric vehicle. It is relying on the Onvo L60 to hasten the arrival of the 1 millionth EV milestone, according to Li.
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China’s EV startups, including Nio, initially targeted the premium end of the EV market. They are now targeting the mainstream market to grow.
Li Auto (LI) in April launched the new L6 SUV, also aimed at the mass market and Model Y. XPeng (XPEV) is expected to debut a sub-brand called Mona in June, which will target an even lower-price segment than Onvo, in the RMB 100,000-RMB 150,000 range.
On May 10, BYD (BYDDF) launched the long-awaited Sea Lion 07. The competitively priced mid-size SUV, starting at RMB 189,800 ($26,242), is seen taking on the Model Y as well.
EV makers are rolling out new and cheaper models amid a bruising price war in China, the world’s biggest car market. An outlier is Tesla, which started the price war in late 2022.
Tesla recently announced plans for “affordable” EVs, but those may be cheaper versions of the Model Y or Model 3 rather than an all-new vehicle. It is seeing demand flag as its EV lineup ages.
Tesla claimed an 11% market share in China in the first four months of 2024. Nio took 3%, according to data from the China Passenger Car Association.
Nio Stock, China EV Stocks
Shares of Nio tumbled 8% to 5.32 on the stock market today. Nio stock surged Monday and Tuesday ahead of the Onvo unveiling event. The EV stock continues to hold above the 50-day moving average. It recovered that support level earlier in May after its April sales outshone those of its startup rivals. Nio remains deep in a roughly 92% slide begun in January 2021.
New IPO Zeekr, Li Auto and XPeng also slid Wednesday. Zeekr stock saw a 35% first-day pop last Friday.
Tesla stock gave up 2%, above the 50-day moving average. BYD gave up 1.2%.
On Tuesday, the Biden administration announced new tariffs on Chinese electric vehicles.
Though most Chinese EV startups don’t sell in the U.S. market yet, some like Nio are expanding overseas.