If EVs can be sold to consumers without batteries, the cost can be lower than fuel cars, said Li Xiang.

(Image credit: CnEVPost)

Li Auto (NASDAQ: LI) and Nio (NYSE: NIO) are seen by many as competitors, but that doesn't stop their helmsmen from appreciating each other.

For lowering vehicle costs, the battery swap model has a very promising future, Li Auto founder, chairman and CEO Li Xiang said at a media event on March 2.

Especially if electric vehicles (EVs) can be sold to consumers without batteries, the cost can be lower than fuel cars, he said, according to a report from Shanghai Securities News.

Li did not directly mention Nio, but he was clearly referring to the latter's business model. In China, Nio is the main provider of battery swap-enabled vehicles for the average consumer, with SAIC Group's Rising Auto also releasing such models last year.

Nio allows consumers to purchase an EV with the battery pack included, or use its BaaS (Battery as a Service) program to purchase only the body and lease the battery.

Consumers who choose to purchase a vehicle using BaaS will have their purchase threshold lowered by at least RMB 70,000 ($10,140), with monthly battery rental fees starting at RMB 980.

Nio's cheapest model, the ET5 sedan, for example, starts at RMB 328,000 for the 75 kWh pack version and RMB 386,000 for the 100 kWh version.

If consumers choose the BaaS option, the vehicle starts at RMB 258,000 and the lease cost is RMB 980 per month for the 75 kWh pack and RMB 1,680 per month for the 100 kWh version.

Li Auto models currently on sale are all SUVs, covering a price range of RMB 300,000 to 500,000, which is a significant overlap with the price range of Nio models.

However, it is worth noting that Li Auto's current models are all extended-range electric vehicles (EREVs), which are essentially PHEVs, and are aimed at a different group than Nio models.

Li Auto, which is targeting a larger total addressable market, has maintained strong deliveries since last year, while Nio is seen as having made a number of missteps.

Li Auto reported solid fourth-quarter earnings on February 27, while Nio reported disappointing fourth-quarter earnings yesterday.

As of Wednesday's US stock market close, Li Auto's market capitalization was $25.5 billion. As a comparison, Nio was $14.9 billion and Xpeng (NYSE: XPEV) was $7.6 billion.

Li Auto's CEO -- one of Nio's angel investors -- has previously praised Nio.

On April 23, 2021, Li said on Weibo that the two best EVs at the then Shanghai auto show were the Nio ET7 and the Zeekr 001.

The ET7's design is mature and confident, while the Zeekr 001 is extremely cost-effective, Li said at the time. Zeekr is Geely's premium EV brand.

The Shanghai auto show is held every two years, with the last one taking place from April 19 to April 28 in 2021, and the next one will be held from April 18 to April 27 this year.

Li also said at today's media event that Li Auto is positioned as the luxury electric vehicle brand of choice for families, according to another local media outlet Jiemian.

The company aims to capture 35 percent of the market share of passenger cars priced above RMB 200,000 by 2027, Li said.

($1 = RMB 6.9036)

Li Auto CEO says NIO ET7 one of the best EVs in Shanghai auto show