NIO Sub-Brand: Produced in a new plant at NEO Park, first model coming in 2024

Written by Cláudio Afonso | | LinkedIn | Twitter

During Q4 2021 Earnings Call, NIO‘s CEO confirmed that plans for its sub-brand was “progressing according to plan”. The sub-brand will target the $30,000 – $50,000 believing that is a bigger market and naming successful automakers that have the same strategy like Audi and Volkswagen, and the Lexus and Toyota. At present, the core team of the new brand has been built, and the first the product has entered a key research and development stage.

NIO’s Sub Brand News

On May 10th, Hefei Economic Development Zone and NIO signed a cooperation agreement on the second phase of the NeoPark Xinqiao Intelligent Electric Vehicle Industrial Park and the supporting projects of key core components.

The project covers an area of 1,860 acres. According to the agreement, it will introduce new mid-to-high-end brand smart electric vehicle products under the NIO Group, and it is planned to be completed and put into operation in 2024.

  • Priced at 30,000-50,000 US dollars, about 200,000-300,000 RMB+ range;
  • The sub-brand may launch its own replacement power station;
  • The current NIO exchange power station will not be shared;
  • The sub-brand will not share NIO House with the NIO brand;
  • There will be independent channels, independent APPS and communities;
  • The person in charge may be Ai Tiecheng;
  • The brand is positioned as a high-end brand;
  • The construction of the new brand core team is completed;
  • The first batch of products have entered the key research and development stage.

NIO CEO thoughts about Sub-Brand(March, 2022)

The mass-market brand has been progressing according to plan. We have established the core team, specified the strategic direction and the brand positioning, and reached a critical research and development stage after the first batch of product, William Li said.

If we want to increase our volume and expand our user base, different companies will have very different strategies. For example, some peers like Tesla, they have adopted very different strategies compared with ours. For Tesla, they basically differentiated the Model 3 and Model Y from the Model X and Model S with a very big price gap.

So by doing this, they entered the mass market with the Model 3 and Model Y. So far, this has been quite successful, but at the same time, we have also seen some downside. For example, the sales of the Model X and Model Y have decreased significantly despite the product cycle. So we believe there are some underlying fundamental rules of the auto industry, that is there is a limited bandwidth of a specific brand.


It’s very difficult to imagine a single brand can actually support the pricing range from RMB 100,000 to RMB 1 million. It’s not feasible, and I believe this is against the common sense. So, for NIO, right now, we target the market segment that is around $50,000 to $100,000 and if we want to reach down to the mainstream market, that is priced around $30,000 to $50,000. We believe this is a much bigger market, and there is a reasonable market size for us to grow and we can also achieve a reasonable growth margin.

We also need to take some lessons learned from the Model 3 and Model Y. We understand, of course, for this mass market, we will also need to rethink the fundamental architecture of our product and also need to think about using different kinds of materials and also different manufacturing technologies for our products because, in terms of the mass-market brand, of course, they also needs to be efficiency-driven. And for this specific market segment, priced from $30,000 to $50,000, we believe, a more sensible approach versus to use a new brand to enter this new market segment. And we believe this is a better strategy for us.

We can also see some successful examples in the market with this strategy. For example, Audi and Volkswagen, and the Lexus and Toyota. We believe this can also be a strategy for us to disrupt the market as well. But, of course, for the mass-market brands, the prerequisite for this is to make sure we can achieve high efficiency and also achieve a reasonable vehicle gross margin, William Li concluded.

According to the SEC form published on Monday, the Norwegian Norges Bank sold its position on NIO dumping a total of 13,749,756 shares during the first quarter of 2022. As reported in March, Norway Central Bank had bought 3,237,003 shares in the last quarter of 2021. At the time, the buy represented an increase of 30.8 percent from the 10,512,753 shares the bank was holding by the end of the third quarter.

As reported by EV, Baillie Gifford & Co filed, on May 5, a new 13F form disclosing ownership of 173,597,921 shares of NIO by the end of Q1 2022, meaning that added 84,739,556 shares during the first quarter of 2022.

As of May 9, NIO has 788 institutional owners and shareholders holding a total of 670,705,982 shares. The largest shareholders include Baillie Gifford & Co, BlackRock, Vanguard Group, State Street Corp, VWIGX, Susquehanna International Group, and Goldman Sachs Group.

Written by Cláudio Afonso | | LinkedIn | Twitter