NIO (NYSE:NIO) plans to launch a lower-priced brand called Onvo on May 15. The Chinese EV major announced its first Onvo model, the L60, which will be a family-focused smart battery electric vehicle (BEV). The BEV is being priced at around RMB250,000, equivalent to around $34,600. NIO’s L60 will compete in the same segment as the Tesla Model Y.
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NIO’s Onvo Brand
Earlier, NIO’s CEO, William Li, told CNBC that the first Onvo car will be an SUV priced cheaper than Tesla’s (NASDAQ:TSLA) Model Y. The company has not specified whether the Onvo brand will be available outside China.
Earlier this week, NIO stated that it intends to bring out two new models in the European market, where one EV model will be a “mass-market brand,” and the other a “smaller EV.” The smaller EV will come in at under $30,000, addressing a common lament from prospective EV buyers about EVs being too expensive.
In April, the company reported a massive 134.6% year-over-year jump, with vehicle deliveries of 15,620, totaling 45,673 units year-to-date.
EV Competition Intensifies in China
As the competition among EV manufacturers heats up in China, Chinese companies are shifting their focus towards offering more affordable EV models targeting the mass market. According to a CNBC report, XPeng (NYSE:XPEV), known for selling cars at a lower price point than NIO, is gearing up to introduce its new brand, Mona, within the next two to three months.
Interestingly, this trend coincides with Tesla facing increasing challenges in China. With EV sales dropping by 18% year-over-year to 62,167 units in April, Tesla’s struggles reflect a broader shift in the market. New energy vehicles, including battery-only and hybrid-powered cars, now command over 40% of new passenger car sales in the country, indicating a changing landscape in consumer preferences.
What Is the Future Price of NIO Stock?
Analysts remain cautiously optimistic about NIO stock, with a Moderate Buy consensus rating based on seven Buys, seven Holds, and two Sells. Over the past year, NIO has declined by more than 30%, and the average NIO price target of $6.92 implies an upside potential of 32.6% from current levels.
