Car NewsWhat car brand is ONVO? What is its relationship with NIO?
On March 13th, the authentic spy photos of the first model of NIO’s sub-brand were exposed online. At the same time, the official name of NIO’s sub-brand has been confirmed as “LeDao Automotive,” with the first model named LeDao L60. The English name for LeDao Automotive is ONVO, with the letter “N” forming the brand logo.
ONVO is a sub-brand of NIO.
NIO Chairman William Li(Li Bin) explained the Chinese meaning of the brand name “LeDao” to users: “LeDao” signifies family happiness, adept household management, and engaging in enjoyable conversations.
Public records show that NIO has previously registered multiple new trademarks, including “LeDao,” “Dongliang,” “Xiangxiang,” and others. Among them, the application date for “LeDao” is July 13, 2022, with NIO Technology (Anhui) Co., Ltd. listed as the applicant.
NIO’s plans for the new brand(ONVO)
As the time approaches, more details about the new brand(ONVO) are gradually emerging.
During a recent earnings call, Li Bin stated that NIO’s new brand aimed at the mass consumer market will be unveiled in the second quarter of this year, with the first model set for release in the third quarter and mass deliveries expected to commence in the fourth quarter.
Li Bin also revealed that the second model under the new brand, an SUV tailored for large families, has entered the mold-making stage and is scheduled for market release in 2025. Additionally, the third model is currently under development.
Based on existing models, the price range for vehicles under NIO’s second brand is expected to be between 200,000 and 300,000 RMB.
Li Bin indicated that this new model will directly compete with the Tesla Model Y and will cost about 10% less to produce. Considering the current price range of the Tesla Model Y at 258,900 to 363,900 RMB, a 10% reduction in cost suggests that the starting price of the new model could be around 230,000 RMB. Given that the lowest-priced NIO model, the ET5, starts at 298,000 RMB, it can be inferred that the high-end version of the new model should be priced below 300,000 RMB.
The difference between NIO and ONVO brands
In order to differentiate itself from NIO’s premium positioning, the new brand will establish an independent marketing channel. Li Bin stated that the new brand will utilize a separate sales network, but some of NIO’s existing after-sales systems will be used for post-sales service. “The company’s goal for 2024 is to establish no fewer than 200 offline networks for the new brand.”
Regarding battery swapping, the models of the new brand will also support battery swap technology, which has been one of NIO’s core competitive advantages. NIO announced that it will have two sets of battery swap networks: NIO’s dedicated network and a shared battery swap network. The models of the new brand will use the shared battery swap network.
The ONVO is crucial to NIO
Current status of NIO
In the industry’s view, the pricing of the new brand, which is more affordable, will be crucial for NIO to turn the tide this year.
On March 5th, NIO released its full-year financial report for 2023, showing year-on-year growth in revenue and sales, but a further widening of losses.
According to the financial report, NIO achieved total revenue of 55.62 billion RMB in 2023, a year-on-year increase of 12.9%; the full-year net loss further expanded by 43.5% to 20.72 billion RMB.
Currently, in terms of cash reserves, benefiting from two rounds of strategic investments totaling $3.3 billion from foreign investment institutions in the second half of last year, NIO’s cash reserves rose to 57.3 billion RMB by the end of 2023. Based on the current losses, NIO still has a safety period of three years.
“On the capital market front, NIO is favored by internationally renowned capital, which has significantly increased its cash reserves, providing sufficient funds to meet the ‘finals’ in 2025,” said NIO.
R&D investment is the main contributor to NIO’s losses, and it has been increasing year by year. In 2020 and 2021, NIO’s R&D investment was 2.5 billion RMB and 4.6 billion RMB, respectively. However, the growth rate subsequently increased rapidly, with R&D investment reaching 10.8 billion RMB in 2022, a year-on-year increase of over 134%. R&D investment in 2023 increased by 23.9% to 13.43 billion RMB.
However, in order to enhance competitiveness, NIO will not reduce its investment. Li Bin stated, “In the future, the company will continue to maintain R&D investment of around 3 billion RMB per quarter.”
Problems with NIO
For new energy vehicle companies, high R&D investment is not necessarily a bad thing, but NIO’s low return on investment is the key reason for industry skepticism.
Data shows that NIO delivered 160,000 vehicles throughout 2023, a 30.7% increase from 2022. In January of this year, NIO delivered 10,100 vehicles, and 8,132 vehicles in February. Sales volume remains a bottleneck for NIO. Despite adopting various promotional methods last year to temporarily boost delivery volume, NIO still failed to meet its annual sales target.
By contrast, in 2023, Li Auto‘s R&D investment was 1.059 billion RMB, with a net profit of 11.8 billion RMB, and annual sales of 376,000 vehicles.
However, during the conference call, Li Bin expressed optimism about NIO’s sales this year, confident in returning to a monthly sales level of 20,000 vehicles.
To return to the level of 20,000 vehicles per month, the second brand ONVO is crucial.
NIO’s future plans
Li Bin stated that the NIO brand will continue to focus more on gross profit margin, aiming for profitability rather than resorting to price wars to increase sales volume. On the other hand, the second brand will prioritize sales volume over gross profit margin, especially in the initial stages. He believes that this combination is a better strategy for the company’s long-term operations.
Additionally, Li Bin revealed that NIO will launch a new brand with a price tag of only tens of thousands of RMB next year, expanding the market coverage of NIO products.
In 2024, with another wave of price cuts looming, the competition in the automotive market is becoming increasingly fierce. It is expected within the industry that the automotive market will undergo a major reshuffle in the next two years. New players in the industry such as NIO and Xpeng, who have not yet turned a profit, need to make no mistakes if they want to break free from their predicament. From the perspective of cash reserves and brand planning, NIO has already made sufficient preparations and is ready for battle.
Car NewsTop 10 sales of electric cars in China in March 2024
Come April 2024, many car brands have already announced their March sales. Let’s take a look at China’s electric car sales rankings in March 2024.
1. BYD sold 302,459 cars in March
In March, BYD sold a total of 302,000 cars, including 287,000 Wangchao/Ocean Network cars, 10,000 Denza cars, 1,090 Yangwang cars, and 3,550 Fangchengbao cars. While many competitors saw declines in sales, BYD’s sales remained strong, maintaining a significant lead. It has to be said that the Honor Edition launched at the beginning of the year has been extremely successful. However, the fact that the combined sales of Yangwang and Fangchengbao are less than 10,000 shows that BYD still needs time to establish itself as a high-end brand.
2. Wuling sold 39,520 cars in March (estimated)
In March, Wuling Motors sold a total of 42,956 cars, with electric cars accounting for 92%. Estimated electric car sales are 39,520 units. Among them, Wuling Rongguang sold 11,190 units, the Baojun sold 12,694 units, and the Hongguang MINI EV sold 16,046 units. Except for the Hongguang MINI EV and the Baojun, Wuling Rongguang also surpassed the ten-thousand mark in sales. It has to be said that Wuling is truly a mass-market manufacturing machine. As long as the price is low enough, Wuling is the people’s choice.
3. GAC Aion sold 32,530 cars in March
Compared to the continuous monthly sales of 45,000 cars in the second half of last year, the recent decline in sales of GAC Aion is quite noticeable. The incremental growth in the ride-hailing market is slightly insufficient, and Hyper, which mainly targets C-end consumers, has not successfully increased its sales volume. These are all the problems that GAC Aion has to face in the recent period.
In addition, with the hot sale of Xiaomi SU7, the competitive pressure on Hyper GT is very high. Hyper’s response has been swift, decisively launching limited-time discounts. Counterattack is necessary, and it remains to be seen how the market will respond!
4. AITO delivered 31,727 cars in March
This time, AITO became the first brand to announce sales figures on April Fool’s Day! Despite most of its competitors failing to meet sales expectations, AITO continues to maintain considerable popularity. With a delivery volume of 31,700 units, AITO has once again surpassed Li Auto. To put it plainly, it’s still a matter of pricing. Both are extended-range SUVs, and the AITO M7 does offer excellent value for money. Now, it remains to be seen how Li Auto will respond.
5. Li Auto delivered 28,984 cars in March
The delivery volume of 28,900 units is honestly not bad. However, what’s frustrating is that Li Auto has been consistently overshadowed by AITO recently. Every time Li Auto announces its weekly delivery figures, it indirectly advertises for AITO. In Li Xiang’s recent apology letter, he also acknowledged the marketing chaos during the launch of the Mega. Regardless, let’s hope that Li Auto can regain its momentum soon!
6. Leapmotor delivered 14,567 cars in March
Among the new forces in the 2014 cohort, aside from Li Auto, Leapmotor has performed the best. The C10 released by Leapmotor some time ago is gradually showing its power. With an 8,295 seat-cabin chip and an integrated central electronic electrical architecture, coupled with a relatively affordable price, the C10 can be said to have almost no shortcomings except for the lack of an 800V charging function. Its good sales are quite normal given its excellent value for money.
7. Changan DEEPAL delivered 13,048 cars in March
DEEPAL is a sub-brand of Changan Automobile, and DEEPAL’s performance last month was quite impressive, with cost-effectiveness being its outstanding competitive advantage. With the launch of the DEEPAL G318, a new category of extended-range off-road vehicles has been created. With the subsequent delivery of the G318, DEEPAL’s sales will have even more growth potential.
8. ZEEKR delivered 13,012 cars in March
The delivery volume of 13,000 units is actually lower than expected. After all, last year’s ZEEKR 007 with 800V was launched, and now the ZEEKR 001 is also equipped with 800V across the board, demonstrating considerable product strength. As for why ZEEKR’s sales haven’t taken off, it’s probably largely related to the Xiaomi SU7. Many people have been waiting for the SU7 to be released and are mostly in a wait-and-see mode. Now that the SU7 mystery has been revealed, ZEEKR dealership orders have also started to increase. It is estimated that for a long time to come, ZEEKR and Xiaomi will be true competitors.
9. Geely Geometry/Geely Galaxy sold 12,882/10,185 cars in March
Geely‘s electric car sub-brands, whether it’s Geometry or Galaxy, have both achieved sales exceeding ten thousand units. Geometry mainly targets the B-end market, with relatively stable order sources, while Galaxy, as Geely’s main C-end passenger car brand, offers quite good value for money. Especially the recently launched Galaxy E8, with its C-class pure electric, 800V architecture, and a price of only 175,900 RMB, it can be considered a strong competitor to Xiaomi SU7. It has to be said that having multiple sub-brands is good for fighting. It proves very useful when besieging individual competitors.
10. NIO delivered 11,866 cars in March
With nearly 12,000 deliveries, it’s better than February. However, to completely break free from the “NIO monthly sales only 10,000” curse, NIO clearly finds it challenging with its existing product lineup alone. That’s why NIO must grit its teeth and roll out the latest Bass policy, offering more discounts to car owners, while also launching the “ONVO” sub-brand. However, ONVO is positioned around 200,000 RMB, coincidentally clashing with Xiaomi SU7. Moreover, Li Bin admitted in a selfie video with Lei Jun that SU7 is too competitive, causing significant pricing difficulties for ONVO. Whether ONVO can rejuvenate NIO depends on Li Bin’s courage in the future.
11. Xpeng delivered 9,026 cars in March
Despite the cheerful appearance of He Xiaopeng attending the Xiaomi SU7 launch event, the truth is that the launch of Xiaomi SU7 poses a significant challenge for Xpeng. The product positioning and pricing overlap considerably. However, Xpeng still has the potential to strike back. Its advanced autonomous driving technology remains the most advanced in the industry. Moreover, with the mid-term upgrade of the Xpeng P7 lineup to full 800V, Xiaopeng has the capability to compete head-to-head with SU7. Xpeng must act swiftly; time is of the essence!
12. Neta delivered 8,317 cars in March
Recently, there have been continuous rumors circulating online about Neta ceasing production, indicating possible operational difficulties. Whether it was Zhang Yong’s live broadcast with Zhou Hongyi a few days ago or the recent announcement of delivery volume, it has been proven that Neta is still alive. The fact that the video of Zhou Hongyi criticizing Zhang Yong could be released also indicates that Neta sincerely hopes for change. Let’s hope that perseverance pays off.
13. Voyah delivered 6,122 cars in March
Voyah, which used to be the first to announce delivery volumes, waited until the end of the month to release them this time. With sales of 6,122 units, it’s still a decent performance compared to previous results. However, for Voyah to further increase sales, it needs to advance 800V technology in its high-end vehicle series and introduce more entry-level models.
14. GWM Ora/WEY brand sold 6022/3608 cars in March
According to the production and sales bulletin released by Great Wall Motors, the group sold a total of 100,000 vehicles in March, which is a decent performance overall. However, when it comes to pure new energy vehicle brands, GWM Ora sold 6,022 units, while WEY sold 3,608 units, which appears to be somewhat dismal. This indicates that Great Wall Motors is more inclined towards choosing traditional fuel-powered vehicle products. Now, Wei Jianjun has already had the Xiaomi SU7 MAX that Lei Jun gave him delivered to the headquarters for careful analysis. It remains to be seen whether this will provide any inspiration to Great Wall Motors.
15. Avatr delivered 5,016 cars in March
As a brand priced at over 300,000 RMB, Avatr‘s performance with 5,016 units is not too bad. However, with the entry of the Xiaomi SU7 into the battlefield, especially the MAX version, it will pose a considerable challenge to Avatr 12. With the 2024 model of the Avatr 12, a more competitive price has been promptly offered in response. It’s no wonder that some netizens in the comments section have expressed, “Thanks to Xiaomi, my Avatr 12 has dropped by 20,000 RMB.”