NIO Plans to Launch Ultra-Luxury Vehicle for Over $144K
A NIO insider familiar with the firm’s new high-end vehicle project disclosed to Chinese media outlet Cheshiwuyu that “NIO is going to make its own ‘Maybach’.” This project has reportedly entered the design stage, and the first model will be an ultra-luxury sedan priced over 1 million yuan [$144,088]. The source added that this new vehicle will also be under the NIO brand. “If it goes well, the model will be launched as early as 2024 for global markets,” said the source.
In the past year, NIO has made great strides in its expansion. At the R&D level, it kicked off development of chips and batteries and has upgraded intelligent platforms. In terms of commercial operations, it entered European markets, released information about its second and third brands, and made frequent moves towards smartphone development.
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During an earnings call for NIO‘s 2022 first quarter financial report, CEO William Li said that the pricing range of “Alpine,” the second brand of the company, is 200,000-300,000 yuan. The products will be based on NT3.0 platform and will start mass production in 2024. “Firefly,” the third brand, will cover the budget market in the range of 100,000-200,000 yuan. It will also try to avoid the highly competitive Chinese market and turn its sight to the European market.
For a long time, the luxury and ultra-luxury vehicle market has been dominated by a few traditional brands. However, in the era of electrification, this market is undergoing transformation. In the past few years, traditional vehicle giants like BMW, Benz and Audi have not kept up with the high growth pace of Chinese new energy vehicle firms.
According to industrial analysts, luxury and ultra-luxury brands are making slow progress in electric transformation, mainly focusing on fuel-powered vehicles. Their advantages in the new energy vehicle market are not obvious, which brings opportunities to Chinese brands.
Weiming Soh, the former global executive vice president of Volkswagen Group, current CEO of Renault China and founder of BeyonCa, believes that 2025 to 2030 will be a period in which the high-end and luxury electric vehicle market witnesses significant changes.
In a mathematical model quoted by Soh, for passenger cars priced over 500,000 yuan, the penetration rate of new energy vehicles in 2021 is about 5%. It is estimated that this rate will reach 45% in 2025 and 75% in 2030. The luxury electric vehicle market scale in China will reach one million vehicles.
HiPhi X, a Chinese luxury vehicle model priced as high as 800,000 yuan, is the first mass production model to challenge the limits of the country’s luxury vehicle brands. It has surpassed the Porsche Taycan many times and became the champion in terms of sales volume for luxury vehicles priced over 500,000 yuan.
HiPhi once disclosed internally that “more than 60% of consumers of Hiphi X are also NIO users.” According to the statistics of third-party monitoring agencies, the average transaction price of NIO in October this year was 466,000 yuan. In the high-end luxury pure electric vehicle market, NIO vehicles accounted for 77.6% in November.
Since there is a need in the market, NIO can pave the way for itself, and shift to the higher-end market. However, the company is facing a lot of pressure. In the third quarter, its net loss expanded to 4.1 billion yuan, up 392.1% year-on-year and 49.1% quarter-on-quarter.