Nio's sub-brand Onvo has officially launched its first model, the L60, which is priced much lower than the Tesla Model Y, but brings more interior space and better features.

In a media communication last December, Nio (NYSE: NIO) founder, chairman and CEO William Li said the company was not in a hurry to launch the first model of its second brand in the face of stiff competition, but would wait until everyone else was exhausted for it to “flip the table”.

The mass-market oriented second brand was known by its internal codename of Alps, and its official name, Onvo, was only confirmed in March of this year when a spy shot revealed its name.

On September 19, in Hefei, Anhui province, where Nio's two factories are located, Onvo officially launched its first model, the L60, in an attempt to make good on Li's promise to enter the market with an attractive price tag at a time when other carmakers are getting tired of price wars.

Li wants the main Nio brand to maintain a premium image, targeting a market with prices ranging from RMB 300,000 ($42,430) to RMB 800,000.

That insistence has left Nio with its hands tied when it comes to dealing with price wars. Onvo, the second brand aimed at the mass market, seems to have escaped that constraint.

In terms of market competition, this is indeed a time when car companies are tired of price wars.

The new round of price wars after this year's Chinese Lunar New Year not only failed to increase car sales, but also dragged down the profits of almost all car companies in China.

It was only in July that the prices from various automakers began to stabilize, allowing the price wars to go off. At the end of July, luxury brands, including BMW, scaled back their discounts in what was seen as a signal that they were pulling out of the price wars.

Price wars have not been a concern for the past two months, but the rollout of the Onvo L60 could potentially make the competition in the pure electric SUV (sport utility vehicle) market more intense.

The Onvo L60 is a mid-size SUV aimed at the family market, the same market that Tesla (NASDAQ: TSLA) is targeting with its Model Y, the top-selling SUV model in China.

The L60 chooses the Model Y as its most direct competitor, with a starting price of RMB 206,900 ($29,260) including the battery pack, which Onvo's president Alan Ai emphasized at today's launch event is RMB 43,000 less than the Tesla Model Y's current starting price of RMB 249,900 in China.

The Onvo SUV's official starting price is also RMB 13,000 lower than the RMB 219,900 that it was priced at when pre-sales began on May 15. That's a much bigger drop than expected, considering Li said on a September 5 earnings call that the L60's final pricing would be “slightly” lower than when it went on pre-sales.

And that's not all. Like Nio's main brand, Onvo supports battery swap, which allows customers to buy the vehicle body only and rent the battery under a BaaS (battery as a service) model, lowering the barrier to purchase even further in response to wider competition.

When purchased under BaaS, the Onvo L60 starts at RMB 149,900, with a monthly battery rental fee of RMB 599 or RMB 899 depending on the battery pack.

For customers who pay a deposit for the Onvo L60 on or before October 8, they can enjoy the benefits offered to the Founding Edition vehicle owners. This includes:

The first owner can enjoy 5 years of free access to the full-scenario pilot assist driving feature NOA from the date of getting delivery.

Owners who purchase a vehicle under the BaaS model can enjoy the next BaaS billing fee waiver after every 4 completed battery rental service billing fees within 5 years, up to a maximum of 12 free BaaS bills.

20 vouchers for 20 totally free battery swap services.

Limited time price of RMB 2,000 for Orange, Blue, Cyan and Purple body colors originally priced at RMB 7,000.

20-inch wheels with original price of RMB 8,000 are priced at RMB 3,000 for a limited time.

Points worth RMB 300 and an exclusive gift pack.

The Onvo L60 is larger than the Tesla Model Y, with a length, width and height of 4,828 mm, 1,930 mm, 1,616 mm and a wheelbase of 2,950 mm.

For comparison, Tesla's SUV has length, width and height of 4,750 mm, 1,921 mm, 1,624 mm and a wheelbase of 2,890 mm.

The Onvo L60 is the first model under the Nio umbrella to be built on the NT 3.0 platform, although the electric vehicle (EV) maker is toning down its emphasis on vehicle platforms. The Nio ET9, announced late last year, is another model based on the NT 3.0 platform, but deliveries won't begin until the first quarter of next year.

The L60, like the ET9, is based on a 900 V high-voltage platform, which delivers lower energy consumption than the traditional 400 V platform. The current Nio main brand models are based on the 400 V platform.

The L60's exterior has also been designed to further reduce energy consumption, with a wind resistance of Cd 0.229, the lowest of any production SUV in the world, according to Onvo.

This gives the L60 a powe consumption of as low as 12.1 kWh per 100 kilometers under CLTC standard.

It has a standard-range battery pack with a capacity of 60 kWh, which provides a CLTC range of 555 kilometers. The long-range battery pack has a capacity of 85 kWh and a CLTC range of 730 kilometers.

A previous regulatory filing revealed that the battery supplier for the Onvo L60 is FinDreams Battery, the battery division of BYD (HKG: 1211, OTCMKTS: BYDDY).

Onvo also plans to introduce an ultra-long range battery pack for the L60, which would allow a range of up to 1,000 kilometers, but no timeline was mentioned.

Semi-solid state battery packs with 150-kWh capacity are already available for the main Nio brand, enabling up to 1,000 kilometers of range in some Nio models.

Unlike the main Nio brand which offers only dual-motor models, the Onvo L60 is available in both single-motor and dual-motor options.

Its single-motor rear-wheel drive variant has a peak motor power of 240 kW and peak torque of 305 Nm, capable of accelerating from 0 to 100 kmph in 5.9 seconds.

The dual-motor four-wheel drive variant has a combined peak power of 340 kW and peak torque of 440 Nm, and is capable of accelerating from 0 to 100 km/h in 4.6 seconds.

The Onvo L60 doesn't use LiDAR like Nio's main-brand models, but uses a 4D imaging millimeter wave radar with a maximum detection range of 370 meters.

Its assisted driving system uses an Nvidai Orin X chip with 254 TOPS of computing power. The currently available Nio main brand models come standard with four Nvidia Orin X chips with a total of 1016 TOPS of computing power.

Onvo's smart driving system, called Onvo Smart Driving (OSD), can be used in 726 cities with the urban pilot assisted driving feature at the time of L60 delivery, according to the company.

Deliveries of the Onvo L60 will begin on September 28.

Onvo's first 105 stores in China opened on September 1, and the number of stores stands at 120 as of today.

The brand aims to have 200 stores in 68 cities by the end of the year.

Nio is aiming to deliver 20,000 Onvo L60s during the year, and is now gearing its supply chain to deliver 10,000 units in December, Li said in a September 5 earnings call.

Nio hopes the Onvo L60 will reach 20,000 deliveries per month sometime in 2025, Li said at the time.

($1 = RMB 7.0707)

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