NIO Capital will invest tens of millions of US dollars in electric vehicle startup Zhixing, whose first car will be an ultra-high-end SUV with a price tag of over one million yuan ($147,738). William Li, the founder and chairman of NIO, once said internally that incubating this project is the firm’s “strategic layout in specific market segments,” LatePost reported on January 9.
Zhixing focuses on adventure and off-road vehicles. Its first car is expected to be released for the Chinese and overseas markets in 2025. The new car will adopt NIO‘s NT 3.0 platform and cooperate deeply with the firm’s supply chains and charging systems. NIO may carry self-developed batteries on the NT 3.0 platform.
Zhixing founder Zhao Lei has worked at vehicle systems provider Banma and automaker Li Auto. At the beginning of 2021, Zhao joined EV maker Cyberspace as the co-founder and CEO, launching the modified car “Cyber Tank 300” in cooperation with Great Wall Motor. At the beginning of 2022, Zhao left Cyberspace and founded Zhixing.
Zhixing has set up teams in China, the US and Europe at the same time. The European team is responsible for R&D of special performance features, and the head is Roger Malkusson, the former vice president of vehicle engineering at NIO. The US team is mainly responsible for adventure experience and product design, and the individual in charge has not yet arrived. Zhixing is also contacting Richard Kim, the co-founder of US startup Canoo and former vice president of design at Faraday Future. In addition, Pan Jiahua, the former CEO of Phoenix Auto Intelligence, an intelligent interactive technology firm, has also joined Zhixing to oversee product lines and intelligence.
Ian Zhu, a partner of NIO Capital, said in an interview with LatePost in October 2022 that he believed that leading enterprises in market segments might have opportunities, and NIO Capital would continue to invest in vehicle projects.
In addition to Zhixing, NIO Capital announced its investment in Lotus, a British sports car company owned by Geely, in September 2021. In October 2022, its first pure electric SUV Eletre was released in China, starting from 828,000 yuan. However, Lotus’s target user group is wider, and Zhixing mainly focuses on adventure and cross-country vehicles.
BYD was the last Chinese company to announce that it would make high-end electric vehicles, and it released its sub-brand “Yangwang” in November of last year. On January 5, Yangwang released two electric vehicles, namely the U8 sports utility vehicle and the U9 pure electric supercar, both of which are priced at over 1 million yuan.
The high-end off-road vehicle market targeted by Zhixing and Yangwang’s U8 is the fastest growing luxury car category at present. According to McKinsey’s research, luxury car buyers have an increasing preference for SUVs. It is estimated that 40% of luxury cars sold in 2031 worth above $80,000 will be SUVs.