Electric Car Startups Nio and Xpeng Introduce Affordable Brands in China, Challenging Rivals Like Tesla and BYD

Rewrite: Beijing – Electric vehicle startups Nio and Xpeng are expanding into a lower priced segment of China’s market this year with plans for new mass-market brands. According to CEO William Li, Nio’s first affordable SUV will be cheaper than Tesla’s Model Y, which costs around 249,900 yuan ($35,197) in China when it is released later this year.
The move puts the companies into direct competition with local rival BYD and German carmaker Volkswagen as early electric vehicle entrants focused on premium vehicles shift towards a broader consumer base to capture larger market shares. The price war for new energy cars, which include battery-only and hybrid powered vehicles, has intensified in China’s automotive industry where such cars now account for over 40% of newly registered passenger car sales. Li told CNBC that while the main brand will not significantly adjust prices due to market volatility, he expects price fluctuations to continue temporarily. Nio’s new brand ‘Onvo’, also known as “Le Dao”, is expected to launch in mid-May with a pricing range suitable for families according to the CEO who added that this name reflects happy times spent together by family members. Xpeng’s Vice Chairman and Co-President Brian Gu said its sub-brand Mona, which will sell below 150,00 yuan ($20,700), would be launched in two to three months as the company aims to bring differentiated technology to a broader consumer base. He also pointed out that while over a dozen brands compete for market share within China’s premium electric car segment; just a few firms now own up to 80% of sales in the mass-market category, leaving significant room for growth and expansion by new entrants. BYD is among such established Chinese competitors already targeting this more affordable niche with its lower end models selling below 120,000 yuan ($17,463) to as high as over one million yuan (approximately $159k). Nio’s Li acknowledged that his new SUV would still be priced at around US$30K (213K CNY), slightly higher than BYD’s offerings.