NIO ET9 debut is nearing; why launch a low volume model?

NIO prepares for the launch of the NIO ET9, priced at 800,000 CNY. Unlike its competitors, the company has decided to push its premium positioning and gain mainstream foothold through sub-brands Onvo and Firefly.

globalchinaev

| Nov 20
NIO ET9 debut is nearing; why launch a low volume model?

NIO had unveiled in December 23, 2023 its most expensive vehicle with a pre-sale price of 800,000 CNY and deliveries are scheduled to begin in the first quarter of 2025.

With most emerging new energy vehicle brands seemingly moving down the pricing segments, such as XPeng with its Mona series and Li Auto with the L6 model, why is NIO moving upwards in pricing with the ET9?

First of all, we need context here. NIO already has 8 vehicle models on the market, with the ET5 and ET5 Touring priced at as low as 298,000 CNY and the ES8 priced at up to 598,000 CNY.

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The company did opt to move into lower price segments, unlike many emerging brands. Instead, NIO deciced to launch different sub-brands.

For example, the Onvo L60 recently debuted at a price of 206,900 CNY and can be purchased with a BAAS plan, renting the battery to reduce the price of the vehicle to 149,900 CNY.

NIO & sub-brands pricing coverage

Then, NIO plans to introduce a second sub-brand, codenamed Firefly, which will capture the entry-level of battery swapping vehicles with prices ranging from 100,000 to 200,000 CNY.

With that being said, the company can now focus on further elevating the brand positioning of its main brand NIO, by introducing an executive saloon like the ET9, expected to start at 800,000 CNY.

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According to a market research survey of 6,700 NEV users conducted by local firm Landroads, NIO is one of 5 vehicle brands positioned as the second highest grade: high-end brands, alongside Mercedes-Benz, BMW, Audi, and Volvo.

Of the 64 surveyed brands, only three other brands are perceived as more premium: Porsche, Yangwang, and Lotus.

Source: Landroads

Landroads also observed a contiuous downward trend in consumers’ brand perception, with the proportion of the mid-to-high-end and above brands dropping from 60% in 2022 to 38% as of H1 of 2024.

Meanwhile, the proportion of mainstream (mid-range and economy) brands increased from 40% in 2022 to 60% this period.

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Given the price war in the automotive industry in China, many brands are slipping in “branding” as they join fierce promotional campaigns.

Hence, one way to mitigate diluting the brand is what NIO opted to do: launching sub-brands with clearly lower positionings.

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In fact, according to the survey, Onvo sits in the mid-end segment, which is two segments from NIO’s positioning.

Tesla, which Onvo directly competes with, sits in the mid-to-high-end brands, alongside Lexus, AITO, Li Auto, AVATR, Polestar, ZEEKR, Denza, and more.

NIO ET9

Morever, launching the NIO ET9, its most expensive vehicle of the lineup, may further strengthen its position amongst the premium brands.

At the 2024 Guangzhou Auto Show, the NIO ET9, alongside Huawei-JAC’s newly unveiled Maextro S800 and BYD’s Yangwang U7, have collectively gained the “789” moniker for the three top premium NEVs in China.

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