Onvo L60 production capacity is expected to reach 10,000 units in December, at least 16,000 units in January and 20,000 units by March, William Li said.

Nio's (NYSE: NIO) management revealed production capacity plans for the L60, the first model from sub-brand Onvo, as the model appears to be gaining good initial acceptance.

Onvo L60 capacity is expected to reach 5,000 units in October and 10,000 in December, Nio founder, chairman and CEO William Li said yesterday.

By January 2025, the model's capacity will reach at least 16,000 units and 20,000 units by March, Li said.

Li revealed these yesterday in Hefei, Anhui province, at a media communications event. The day before, Onvo officially launched its first model, the L60 SUV (sport utility vehicle), on September 19 in the city.

Nio currently has two vehicle assembly plants in Hefei, and Li said they can support a capacity of 10,000 Nio models and 20,000 Onvo models per month.

This capacity planning is not a temporary decision, but the result of conversations with supply chain partners that began in the first half of 2022, Li said.

Li emphasized that for any new model, capacity increases have to abide by the laws of reality, and it is not possible to provide a high level of capacity as soon as it is launched.

Including the battery pack, the Onvo L60 starts at RMB 206,900 ($29,340), which is RMB 43,000 less than the Tesla Model Y's current starting price of RMB 249,900 in China.

The Onvo L60 starts at RMB 149,900 when purchased on a BaaS (battery as a service) basis, with a monthly battery fee of RMB 599 or RMB 899 depending on the battery pack.

For that pricing, the Onvo L60 could still make a gross profit, Li said.

As before, Nio did not release initial order figures for the Onvo L60, but Li said yesterday that orders for the model were “exploding”, a description he has not used before.

Onvo's server capacity was expanded five-fold in anticipation of the L60's launch, but it remained overloaded after the price announcement, according to Li.

Yesterday afternoon, Nio held a meeting with supply chain partners in Hefei to secure component capacity for the Onvo L60.

Nio's F2 plant has begun double-shift production, and construction has begun on the F3 plant, which will go into production in the third quarter of next year, Li said in a September 5 earnings call.

Li also touched on Onvo's product plans during yesterday's media communications, saying the sub-brand will launch one new model per year.

Onvo will launch a mid-to-large-size SUV in 2025, a model that will be a revolutionary product that will bring surprises and will begin deliveries in the third quarter of next year, Li said.

“If you think the L60 is good, then this new model is a much more competitive product,” Li said.

Nio hopes that each of Onvo's cars will have decent deliveries and become “gravity models”, like the Model Y, he said.

($1 = RMB 7.0513)

Nio Onvo launches L60 to take on Tesla Model Y, and wider competition