Nio, Inc. NIO, a manufacturer of premium electric vehicles, is close to launching a vehicle catering to the mass market, if reports are to be believed.
What Happened: Nio has a set a timeframe of the first half of 2022 to launch a mass market model under a different brand name, the CnEVPost reported, citing local Chinese news outlet 36Kr.
To that end, the company has reportedly hired WeWork Greater China executive Ai Tiecheng to supervise the entry-level model. Tiecheng is being appointed as VP of strategic new business and will directly report to Nio's founder, chairman and CEO William Li, the report added.
Rumors of Nio's entry into the mass market have been doing the rounds for some time. In the interim, it emerged that Nio may want to preserve Nio's image as a premium vehicle brand and therefore would roll out the mass market model under a different brand name.
The new sub-brand would be priced at 150,000-250,00 yuan ($23,200-$38,680), the report said. Sources elsewhere suggested that the vehicle could be positioned similar to China's Wuling Hongguang Mini EV, priced at around 30,000 yuan.
Since July 2020, when the Wuling Hongguang Mini EV was first marketed, more than 270,000 units of these vehicles have been sold.
The Nio sub-brand is already being developed in Hefei, the report said.
Related Link: Nio Day 2021: Suzhou Wins The Race to Host EV Maker's Annual Event, Beating Out Hefei and Xi'an
Why It's Important: The average price of a Nio EV is 434,700 yuan, Li said in a conference in late May. The company has developed technology and services such as battery swapping, battery-as-a-service and ADAS-as-a-service to make its vehicles affordable to buyers.
Although Nio can boost volumes with this proposed mass market EV, it remains to be seen if Nio can preserve its gross margin. There is also the danger of consumer perception of the company taking a hit. Nio has managed to wrest mindshare, primarily on its premium positioning.
The upcoming year could be exciting for Nio. The company is scheduled to launch its first-ever sedan, the ET7, in the first half of 2022.
At last check, Nio shares were up 4.65% at $44.58.
Related Link: Tesla, Nio Shares Diverge: What Does It Signal For The EV Companies?
Photo: Nio's Hefei, China headquarters.
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