In an attempt to compete with Tesla’s (NASDAQ: TSLA) rapidly selling Model Y, Nio (NYSE: NIO) has formally introduced its Onvo (Ledao in China) sub-brand and begun pre-sale of the new brand’s first model, the L60.

The multi-brand expansion of the Chinese electric vehicle (EV) manufacturer began today with the debut of the Onvo brand in Shanghai, the location of its worldwide headquarters.

Nio has another internal sub-brand called Firefly that targets the lower-priced market, while Onvo is a sub-brand with the internal codename Alps that targets the mass market.

Onvo means “On Voyage,” while its Chinese name, “Ledao,” means “Path to Happiness,” with a particular emphasis on families.

Ai Tiecheng, a former executive at Disney, is the new brand’s president.

William Li, the founder, chairman, and CEO of Nio, stated at the company’s debut today that Onvo, which was founded three years ago, has built a full range of system capabilities and is further boosted by Nio’s capabilities and resources acquired over the previous ten years.

Onvo has gained competitive advantages in R&D, supply chain, production, quality, charging and battery swap network, sales, and service network thanks to Nio’s R&D investment of more than RMB 43 billion, Nio stated.

L60 Begins Pre-selling

At today’s launch ceremony, Onvo unveiled the L60, a crossover that directly competes with the Tesla Model Y but costs less.

The 900 V high-voltage architecture upon which the Onvo L60 is based indicates that increased voltage translates into higher energy efficiency.

According to Onvo, the model uses only 12.1kWh of energy every 100 kilometers and has the lowest wind resistance of any production SUV in the world, at 0.229 Cd. Its CLTC energy efficiency is 92.3 percent.

Though the EV manufacturer is downplaying the vehicle platform narrative, the model looks to be the first production vehicle on Nio’s next-generation vehicle platform, NT 3.0.

The 900 V high-voltage architecture is also the foundation for Nio’s ET9, which was introduced on December 23, 2023, during its Nio Day 2023 event. Deliveries are scheduled to start in the first quarter of 2025.

Both Tesla’s Model Y and Nio’s current line of vehicles are constructed on the standard 400 V chassis.

At the conclusion of today’s event, Onvo started taking pre-orders from customers for the L60. The model’s pre-order pricing, including the battery, was set at RMB 219,900 ($30,440).

The pre-sale price is precisely RMB 30,000 less than the starting price of the Tesla Model Y in China, as the Nio sub-brand made clear.

Customers can save RMB 6,000 from the cost of the automobile if they pay RMB 2,000 to pre-order the L60 today.

September is when the L60 will formally go on sale, according to Onvo, who made the announcement today.

Similar to Nio’s models, the Onvo L60 includes battery swap capability, which lets it lower the purchase threshold and obtain a completely charged battery in a matter of minutes.

Nio’s vehicles see a starting price reduction of at least 70,000 yuan under its BaaS (battery as a service) battery leasing model, while Onvo has not yet disclosed the starting pricing for the L60 without a battery pack.

According to Onvo, there will be more than 1,000 battery switch stations accessible for the L60 at launch. In order to support the model, almost half of Nio’s present stations will need to be modified.

Based on statistics provided by CnEVPost, Nio currently has 2,415 battery swap stations in China, 798 of which are situated beside roads. Additionally, it offers 24,036 charging piles at 3,841 charging stations.

Fundamental requirements

The Onvo L60 is a mid-size SUV with a wheelbase of 2,950 mm and dimensions of 4,828 mm in length, 1,930 mm in width, and 1,616 mm in height.

In contrast, the dimensions of the Tesla Model Y are 4,750 mm for length, 1,921 mm for width, 1,624 mm for height, and 2,890 mm for wheelbase.

The L60 has a CLTC range of 555 kilometers for the normal version and more than 730 kilometers for the long-range variant, according to Onvo, who has not yet disclosed information about the battery pack.

The L60 will be offered with an ultra-long-range battery pack, giving it a range of more than 1,000 kilometers, similar to Nio versions.

Nio’s 150-kWh semi-solid battery packs, which can provide the ET7 car with a range of over 1,000 kilometers, are currently in experimental operation.

The Onvo L60’s assisted driving system eliminates the LiDAR from the roof’s center while keeping the cameras on either side. This is in contrast to the Nio models’ system, which combines cameras and LiDAR technology.

Notably, Onvo upgraded the L60 with a 4D imaging radar—a feature absent from the existing Nio models—which improves obstacle recognition over the cameras.

The SFR-2K 4D imaging radar is manufactured by the local firm SinPro, which was funded by Nio Capital in April 2023.

According to a statement released by SinPro today, the SFR-2K will come standard on all Nio NT 3.0 platform models. The Nio ET9, in addition to the Onvo L60, also has the component.

The Onvo L60’s assisted driving technology is powered by an Nvidia Orin X CPU, which can deliver 254 Tops of processing power.

As of right now, Nio models have four Orin X chips, or 1,016 Tops, as standard.

Unlike the vertical screen of the Nio series, the center screen of the Onvo L60 is 17.2 inches horizontal.

The model retains the HUD (Heads Up Display) feature but lacks a dashboard similar to Nio versions.

The Onvo L60 will compete against the Model Y, a Tesla SUV that is among the best-selling globally and a best-seller in China.

The Model Y accounted for 456,394 of Tesla’s total sales in China in 2023, or 75.6% of the company’s total sales of 603,664 units.

Li stated in March during a user-communication event that anyone who wanted to purchase the Model Y should hold off since the first model from Alps (Onvo) will undoubtedly be superior and less expensive.

But it’s not going to be simple to take on the Model Y. Over the past few years, a number of Model Y competitors have entered the Chinese EV market, but none of them have yet to really challenge the status of the Tesla model.

The Model Y sold 126,722 units in China between January and April of this year. This is more than Xpeng’s (NYSE: XPEV) sales in the first eleven months of last year and on par with Nio’s sales in the first ten months of 2023.

The cost of BaaS may be a wild card for the L60. Things might be very different if Onvo offers a considerably cheaper beginning price without batteries as well as highly appealing battery rental costs.