U.S.-listed Chinese electric vehicle maker Nio Inc on Wednesday confirmed plans to foray into the mass market, as per the company’s CEO William Li.
What Happened:Nio will enter the mass market through a new brand, Li told investors during the second quarter post-earnings call.
The Shanghai, China-based electric vehicle maker told investors that a core team of the new brand has been assembled.
The model will be the lowest priced in NIO's product lineup, Li said.
Nio has been reported to be planning a more affordable sub-brand around the $31,300 price band. The yet-to-be-named sub-brand is expected to operate independently and will have a positioning below Nio.
Nio's current line of vehicles is focused at the high-end of the market and priced no less than RMB 358,000 (USD $56,000) unless customers choose to opt for a battery-as-a-service subscription and pay an additional monthly fee.
Nio is also reportedly working on a new high-end product that is scheduled to be launched next year, code-named Gemini.
Why It Matters:The lure of mass-market is not new for automakers as it helps bring scale and Nio has in the past few years tried different approaches to make that foray through joint ventures and investments with GAC and Changan.
Nio had earlier this year in an earnings call revealed that the stake in those partnerships is now down to 5% from over 40% earlier, giving the EV maker more flexibility and possibilities to try different approaches to enter the mass market.
"We are actively looking at ways to enter the mass market more aggressively, which is a long-term strategy for us," Li had then said.
The Tesla Inc rival had in April said electric vehicle brands that gain market share by “constantly lowering” prices will only hurt their own brand image.
Price Action:Nio shares closed 0.59% lower at $43.97 on Wednesday and were up 1.11% in the extended hours.