Nio's mass-market sub-brands will be priced in the RMB 200,000 range, and they will compete with Tesla's Model 3 and Model Y, but at a 10 percent discount, Li said.

(Image credit: CnEVPost)

Nio (NYSE: NIO, HKG: 9866, SGX: Nio) has signed an agreement with Hefei, Anhui province, for the second phase of its NeoPark plant in preparation for its sub-brand's 500,000-vehicle annual production capacity, company founder, chairman and CEO William Li said today.

Li revealed the plan at a communication event with users in Hefei today, which was broadcast live on Nio's mobile app.

The mass-market sub-brand will be priced in the RMB 200,000 ($30,000) range, and they will compete with Tesla's Model 3 and Model Y, but will be 10 percent cheaper, Li said.

Under current plans, deliveries of the sub-brand model will begin in the second half of 2024, and it will be very competitive, Li said.

Notably, in a conference call after announcing its first-quarter earnings report on June 9, Li had mentioned that product development and production of Nio's new brand was progressing steadily.

On May 10, Nio signed a strategic cooperation agreement with Hefei on NeoPark Phase II and key core components supporting projects and began planning and preparing for the production capacity construction of the new brand's products, he said at the time, without disclosing further details.

But according to an article released by the Hefei municipal government on May 10, the project, which covers 1,860 mu (1.24 square kilometers), will import intelligent electric vehicle products under Nio's new mid- to high-end brand and is scheduled to be completed and put into production in 2024.

The new brand will compete with car companies including Tesla and Volkswagen, the article noted, adding that its core team is now built and the first products are already in key development stages.

Nio plans to start delivering models for the mass market in the second half of 2024 at a price of between RMB 200,000 and 300,000, Li said on the earnings call.

The sub-brand's model will be based on the NT 3.0 platform and carry batteries made by Nio, he said, adding that it will also support battery swap and high-voltage fast charging.

After much speculation, Nio confirmed it would launch the sub-brand about 1 year ago.

Nio will enter the mass market with the new brand, preparations for which have been accelerated and a core team has been established, Li said on the company's 2021 second-quarter earnings call last August 12.

"The Nio brand has a similar relationship with this new brand as Lexus has with Toyota and Audi has with Volkswagen," he said.

Li said Nio will launch the mass-market brand that it hopes will be less expensive than Tesla, but the experience will surpass the latter.