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China’s Nio has launched a direct challenge to Tesla’s best-selling Model Y SUV, with the first electric vehicles out of its new lower-priced brand Onvo.
In Shanghai on Wednesday, Nio unveiled the L60 SUV, an EV priced about 10% cheaper than Tesla’s Model Y. The L60 starts at 219,900 yuan ($30,465), compared to the Model Y’s 249,900 yuan price tag ($34,500). Nio has started taking orders for the L60 and aims to begin deliveries by September.
“With technologies evolving and people’s understanding in smart EVs deepening, today it’s time for us to redefine the new standards for family cars,” Nio CEO William Li said at Wednesday’s launch event. Li also said the L60 is meant to rival the Model Y and Toyota Motor’s RAV4.
Li on Thursday warned that China’s market — home to as many as 123 automakers building EVs — has “already consolidated to 20-30 active players” and that the consolidation “will continue but will not be very severe,” Reuters reports.
Nio also plans to launch a new model each year under the Onvo brand, starting with a model targeted at larger families. The brand is expected to help Nio boost sales and increase profits when monthly sales reach 20,000 units. Nio in April delivered 15,620 cars, a 134% year-over-year increase.
The company has invested greatly in EV infrastructure, including charging stations and battery-swapping, to help attract consumers and develop partnerships with fellow automakers. That includes Changan Automobile and Geely, the Chinese company behind Zeekr, Volvo, and Polestar.
At least six Chinese EV makers have partnered with Nio to receive access to its battery-swapping stations, a business that Li expects to earn $10 billion annually when its user base grows by 100 times from its current roughly 500,000 units. Li also announced plans to add 1,000 additional swapping stations in 2024, taking Nio’s total to 3,415.
Other Tesla rivals
Nio isn’t alone in planning rivals to match — or beat — Tesla’s offerings.
Xioami, the Chinese smartphone maker who recently launched an electric car to rival the Tesla Model 3, plans to build an electric SUV similar to the Model Y. Xiaomi acknowledged in March that Tesla is a “role model for all EVs in the world,” as showed the SU7 largely outperforming the Model 3.
BYD has applied for Bejing’s approval to unveil a smaller version of its Seal sports sedan, as the automaker continues to develop and offer more options. The company’s massive success draws mostly from its cheaper cars, which has led some to label it a “Tesla killer.”
Read more: Tesla is facing major competition in China. Here are its biggest rivals
Chery last week unveiled its first midsize electric crossover, the Sterra ET, which it says can compete with the Model Y and Audi’s 5Ql. And Li Auto has priced its five-seater Li L6 midsize SUV at least 5% cheaper than the Model Y.
Meanwhile, the executive known as Tesla’s “fireman” — Senior Vice President of Automotive Tom Zhu, who has been credited with turning Tesla’s Gigafactory Shanghai into a major performer — is returning to his role overseeing the Chinese market. That move comes in the wake of multiple rounds of layoffs and an executive-level restructuring.
Tesla is looking to boost its profile in China, slashing prices and making major strides toward getting a full launch of its Full Self-Driving driver assistance technology after a surprise trip to Beijing last month by CEO Elon Musk. Although the U.S. company maintained its position as China’s second-largest seller of EVs last month, sales slipped 18% year-over-year.