In a surprising turn of events, NIO, a high-end electric vehicle manufacturer known for its premium models priced over 300,000 RMB, has introduced a budget-friendly model priced at just 149,000 RMBThis dramatic shift in strategy raises several questions about the company's direction and its attempts to improve sales amidst ongoing financial struggles.

In May, NIO launched its second brand, ONVO, with the first model, the ONVO L60, garnering significant attentionFour months later, on September 19th, the vehicle officially hit the marketThe starting price for the L60 with standard range configurations is set at 206,900 RMB, while a long-range variant begins at 235,900 RMBHowever, if buyers opt for the battery rental service, the price drops to a base of just 149,000 RMB.

Despite the lack of official order numbers, NIO reports high demand for the L60, indicating that the model has already exceeded anticipated sales goalsThis begs the question: can this new model truly revitalize NIO’s sales figures and help the company break free from its history of deficits?

The ONVO L60 is classified as a mid-sized electric SUV, strategically designed for family useIt comes in two versions: one with a 60 kWh battery for standard range and another featuring an 85 kWh battery for extended rangeNotably, the starting price for the vehicle was lowered by 13,000 RMB compared to its initial projected price during the launch event.

Similar to other NIO models, the L60 features a battery swap capability, sharing the existing battery swap network with its parent companyFor customers who choose to utilize NIO’s Battery as a Service (BaaS) model, the prices for both range configurations of the L60 can start from as low as 149,000 RMB, with monthly rental fees for the battery options set at 599 RMB and 899 RMB respectively, significantly reducing the initial financial barrier for potential buyers.

Furthermore, customers who placed pre-orders for the L60 by October 8th are dubbed "founding" users

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They enjoy a package of benefits valued at over 41,000 RMB, including five years of free use of full-scene NOP (Navigation on Pilot), twenty battery swap experience vouchers, and a variety of customization options.

As a five-seater SUV primarily targeted at family-oriented use, the ONVO L60 emphasizes spaciousness and energy efficiencyThe official measurements claim that the L60 boasts greater rear seat space compared to the popular Tesla Model YThe ONVO L60 reportedly offers rear knee room of 160 mm and shoulder room of 1420 mm, providing ample space for passengers, which is evidenced by presentation videos showing rear passengers comfortably crossing their legs within the vehicle.

The L60 also stands out in terms of storage capability, with its trunk able to accommodate five pieces of luggageAlthough it lacks a front trunk, it features a significant sunk space under the trunk that can serve as extra storageAdditionally, there is an option to purchase a 52L refrigerator developed in collaboration with Midea.

With respect to energy consumption, the L60 utilizes advanced 900V architecture to minimize resistance and reduce overall energy useThe official Chinese light-duty vehicle test cycle (CLTC) reports energy consumption figures of 12.1 kWh per 100 kilometers, which is lower than the 12.5 kWh for the Model YBefore the vehicle launched, ONVO conducted a 20,000 km endurance live broadcast, where the average consumption, while carrying three to four passengers with luggage, was recorded at 12.3 kWh per 100 kilometers, highlighting its efficiency.

Beyond its spaciousness and energy efficiency, the L60 integrates a smart cockpit and advanced driving assistance featuresDrawing from NIO’s technological expertise, the L60 is equipped with the NT.Coconut smart system and a high-performance Qualcomm Snapdragon 8295P cabin chipFor driver assistance, it incorporates a purely visual solution without LiDAR, branded as ONVO Smart Driving.

Overall, the ONVO L60 presents a well-rounded package with no apparent weaknesses, demonstrating commendable market competitiveness

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However, whether it will significantly impact NIO’s financial recovery remains uncertain.

For NIO, the ONVO brand represents a crucial step towards profitabilityAs one of China’s earliest new energy vehicle startups to go public, NIO has struggled to achieve sustainable profitsFrom 2018 to 2023, the company sustained cumulative losses exceeding 86.63 billion RMB, with net losses of approximately 5.26 billion RMB for both the first and second quarters of this yearThe company’s total losses close to 100 billion RMB since its inception is a stark reminder of the challenges it faces.

High research and development costs, along with extensive selling, general, and administrative expenses, primarily drive NIO’s ongoing financial woes, compounded by high vehicle pricing and relatively low sales volumesIn an industry where economies of scale are key, insufficient sales volume leads to elevated manufacturing costs and difficulty allocating R&D and marketing costs across each vehicle.

NIO currently offers eight models, with the lowest starting price at 298,000 RMBAs of August, they reported total sales of 128,100 units in 2023, averaging around 15,000 units per monthThe best-selling models are the ES6 and the ET5, with respective sales of 47,713 and 31,051 units, reflecting a trend toward more affordable offerings within the NIO lineup.

The introduction of the ONVO brand, coupled with the significantly lower price point of the L60, aims to boost sales for NIOCEO Li Bin expressed confidence during interviews, assuring that ONVO’s pricing strategy retains a profit margin despite the cost reductionsHe emphasized that this vehicle benefits from NIO's existing mature supply chain and targets the family market directly.

In the competitive landscape of mid-sized SUVs, the ONVO L60’s pricing and offerings position it favorablyFor instance, in August, the Tesla Model Y topped the mid-sized SUV sales charts with over 45,000 units sold

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