NIO Plans to Launch New Brand Targeting Lower-End Market

In addition to its NIO and ALPS brands, Chinese electric vehicle maker NIO is reportedly planning to launch a third automobile brand to cover the market below 200,000 yuan ($29,620), 36Kr reported on August 1, citing people familiar with the matter.

Like NIO and ALPS, this third brand will be operated independently, with a separate R&D system and management. The EV maker is currently recruiting core team members for the new brand.

“The price range of the third brand’s models is mainly 100,000-200,000 yuan,” sources said. Within NIO, the three major brands are compared to “Lexus, Toyota and Suzuki” within Toyota Group, which achieved global automobile sales of 10.5 million units in 2021.

Last year, 36Kr reported that NIO planned to launch a new brand with an internal code name of “ALPS,” while Alan Ai, the former head of WeWork Greater China, would be in charge of the new brand. In the early days, models under ALPS were reported to be priced at 150,000-300,000 yuan, but in a telephone conference for NIO‘s financial report in the first quarter of this year, William Li announced that the price range of models under ALPS would be between 200,000 yuan and 300,000 yuan, and mass production would be carried out in 2024.

Other domestic car making companies, such as Hozon Auto and Leapmotor, have a sustainable monthly sales volume of more than 10,000 units, with entry-level models worth about 100,000 yuan. Models such as Toyota Corolla and Volkswagen Lavida are also priced about 100,000 yuan. NIO‘s plans to enter this market seem reasonable.

However, to occupy a new market, there is no consensus whether to use models with different pricing or launch an independent brand. Tesla Model S and Model X sell for over one million yuan, but Model 3 only sells for 240,000 yuan. Li Auto, another EV maker in China, has also planned a model with price span of 200,000-500,000 yuan, but the company does not plan to launch an independent brand.

Li believes that the price range that a brand can carry is limited, and it is necessary to start a new brand to launch more affordable models, which is also very common in the automobile industry.

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With the launch of the new brand, NIO has begun to sort out R&D resources. NIO employees said that some technologies will be developed based on united platforms, such as electric power and advanced driving assistant systems (ADAS), but different brands also need their own R&D systems, channels and service systems.

In addition to cars, NIO also plans to launch smartphone products. On July 31, Li said that NIO’s goal is to build a good smartphone for NIO users. “We will develop a smartphone every year, just like Apple,” Li added.