(Yicai) May 21 -- Nio has recently debuted its second vehicle brand Onvo, and presales of the first model, the Onvo L60, has already started, with pricing in the lower range of the new energy vehicle market. This puts it in direct competition with Li Auto, the Chinese electric car startup’s chairman and chief executive officer said in a recent interview with Yicai.

“Both Onvo and Beijing-based Li Auto target the personal use auto market and their prices overlap. I believe there will definitely be competition between the pair,” said Li Bin. 

The Onvo L60 will be around 10 percent cheaper than US carmaker Tesla’s Model Y at CNY219,900 (USD30,389), while still maintaining a respectable gross profit margin, Li said.

Orders so far have exceeded expectations, Onvo President Ai Tiecheng said, without disclosing any figures.

The launch of Onvo marks Nio’s expansion into multiple marques. And within the next year, the Shanghai-based company also plans to unveil ‘Firefly,’ its third vehicle brand that will target the lower end market and cost less than its Onvo and Nio models.

By having models in both the mainstream and luxury markets, it will not only ensure the value of Nio’s high-end cars, but also extend the company’s footprint into the mainstream market of cars for personal use, Li said. This will amplify Nio’s strengths in systematization, unleash efficiency-related dividends of early-stage technological research and development and infrastructure investment, and generate economies of scale.

“The multiplexing of software and hardware can increase economies of scale which can greatly reduce costs and boost R&D efficiency which will in turn lower costs further through R&D,” Li said.

Nio has shortened the period between presales and deliveries after the Nio ET5 lost a large number of orders due to an excessively long shipment period. Deliveries of the Onvo L60 will start in September. This is around four months after presales start.

The Onvo L60s will be produced at Nio’s newly built second factory in Xinqiao Industrial Park in eastern Anhui province, together with Nio’s ET5 and ES8 models.

Editor: Kim Taylor