Author | Zelin Leng
Editor | Pan Wang
According to the news released by Hefei, on May 10th, the Economic Development Zone in Hefei signed a cooperation agreement with NIO for the NeoPark New Bridge intelligent electric vehicle industrial park’s second vehicle and key core component supporting projects.
The project covers an area of 1860 mu, and under the agreement, NIO’s entire range of medium-to-high-end intelligent electric vehicle products will be introduced. It is planned to be completed and put into operation in 2024.
Interestingly, before the May Day holiday, the NeoPark New Bridge intelligent electric vehicle industrial park’s NIO second production base’s first mass-produced model, ET5, successfully completed the first batch of full-process production line trial production. This means that the production line has been completely connected and has entered the vehicle production validation phase.
It is reported that NIO’s new brand will compete with Tesla, Volkswagen, and others. Does this mean that it will be a “downward” blow?
Currently, Volkswagen has three models in its ID series, with a price range of 1.598-3.358 million yuan, and Tesla produces two domestic models, Model 3/Y, with a price range of 2.799-4.179 million yuan.
Overall, NIO’s new brand may be priced between 200,000 to 350,000 yuan, which is exactly the same price range as NIO’s lowest-priced ET5 model.
Previously, in the Q4 telephone conference in 2021, Li Bin revealed that the new brand business for the mass market had progressed smoothly. The core team has been built, and the first batch of products has entered the critical R&D stage.
In terms of form, NIO seems to have been following Tesla’s footsteps. There are passionate Musk followers abroad, and organizations like “Jing Wei Jun” domestically.
Starting with the release of its first two-door sports car Roadster in 2008, Tesla has attracted a large number of high-end customers. From luxury to mass market, Tesla has walked a unique path with its Model S/X/Y/3.
NIO has been following the same approach. In 2016, NIO’s EP9 electric supercar made its debut in London, and the first batch of six cars were handed over to six founding investors, including Ma Huateng, Liu Qiangdong, and Lei Jun, all of whom are renowned entrepreneurs in the internet and technology industry. Two years earlier, Elon Musk flew to China to hand over the keys to the first batch of Model S to founders such as Yu Yongfu, Li Xiang, and Yin Xidi.
Similar to the effect of stars making their debut, both NIO and Tesla received good results.
NIO has maintained a price range of 350,000 to 500,000 yuan for a long time. Now, NIO is entering the mass-market, seemingly paying homage to Tesla, its predecessor.However, the current market is different from when Tesla was produced in China. Apart from the “absolute overlord” Tesla, XPeng P7, BYD Han, and Volkswagen ID series have also shown strong competitiveness in this price range.
At the same time, NIO’s new brand will still need at least two years. By then, technology companies such as Xiaomi and Jidu will also launch new energy vehicle models, and even Ideal disclosed during the Q1 conference call that it will launch a medium-sized car priced at 200,000-300,000 yuan next year.
On the other hand, Tesla’s users are more inclined towards technology while NIO’s stronger moat is its service system. Although Tesla’s brand strategy from high to low has lowered prices, it has continued its “geek” style, whereas NIO’s use of a new brand is actually intended to differentiate user groups, maintain NIO’s high-end positioning, and leave the crowd that values services with NIO. The new brand will be responsible for developing entirely unfamiliar target audiences, which means it’s difficult for it to inherit anything from NIO.
Clearly, NIO’s “de-dimensionalized” market won’t be as easy as Tesla’s.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.