"Smarter Than Smart, More Than MINI" What is Firefly's Addressable Market?

Source: Firefly

On December 21, NIO Inc. CEO and Chairman William Li revealed the third brand of the company, Firefly.

Firefly will be positioned as a high-end compact electric car brand benchmarking the MINI and Smart at a starting price of 148,800 CNY.

Source: Firefly

William Li made it clear on stage that the Firefly brand is benchmarked against the higher-end compact car brands MINI and Smart.

The MINI brand joined the BMW portfolio through the acquisition of the Rover Group in 1994. In 2014. BMW began selling the MINI cars in China to tap into the growing demand for premium compact cars.

MINI currently sells the Cooper EV at a price of 209,800 to 266,800 CNY with a CLTC range of up to 456 kilometers.

The Smart brand on the other hand entered the Chinese market through a joint venture between Mercedes-Benz and Swatch in 2009.

In 2019, Mercedes-Benz and Geely joined hands to develop the next generation of Smart compact cars for Chinese consumers.

Smart features three vehicle models in China, the Smart #1, #3, and #5. The Smart #1 is the main volume driver as the most affordable compact EV of the trio, starting at 154,900 CNY with CLTC range of 400 km.

The long range version offers up to 535 km at a price of 174,900 to 199,900 CNY.

The premium segment of compact cars can be regarded as a niche market with the best-selling Smart #1 selling just over 33,000 units in 2023 and c. 20,000 as of Nov-24 YTD.

In 2024, Smart #1 and MINI Cooper EV combined sold a combined total of c. 25,000 units as of November 2024.

In 2024, the five largest volume sellers in the compact cars segment are the BYD Seagull, Wuling Bingo, BYD Seagull, ORA Good Cat and Geely Xingyuan.

The best-selling compact car is indisputably the BYD Seagull, which started delivery in mid-2023 and has sold nearly 400,000 units already in 2024.

Four models belong to the mid-range segment of compact cars, including the BYD Dolphin and ORA Good Cat, starting at 99,800 CNY and 105,800 CNY, respectively.

On the more expensive end of the mid-range are the Volkswagen ID.3 and the ZEEKR X, starting at 129,888 CNY and 149,000 CNY, respectively.

Another new compact car debuted on December 22, the Lynk & Co Z20, which shares many design elements with the sister brand’s ZEEKR X. The Z20 will be priced at 138,900 CNY.

Given that Firefly, like NIO and Onvo, will be able to swap battery, buyers will also be offered the BaaS option, which enables reducing the starting price with monthly installments to rent the battery.

Depending on the battery size, Onvo and NIO vehicles can reduce that starting price by 57,000 CNU (60 kWh battery) to 128,00 CNY (100 kWh battery) with rental payments of 599 CNY to 1,680 CNY.

Source: Firefly

While the Firefly battery is expected to be of smaller capacity, we can expect users to benefit from BaaS, which could potentially reduce the vehicle’s starting price to as low as 100,000 CNY.

At this price, Firefly may be able to appeal to certain buyers from the mid-range segment.

In fact, the mid-range segment is significantly a more appealing playground, with sales volume reaching over 400,000 units just between the BYD Dolphin, ORA Good Cat, Volkswagen ID.3, and ZEEKR X last year.

This year, their combined sales have fell to c. 270,000 units (Nov-24 YTD) partly due to new and more affordable models like the BYD Seagull.

Nonetheless, Firefly is positioned at the higher-end, akin to the NIO brand, but is enabled to compete downward with BaaS.

To what extent will consumers consider Firefly as an alternative to a BYD Dolphin will have to wait and see, but what is clear is the addressable market of the premium compact car is too small.