Nio Inc., the Chinese electric vehicle (EV) manufacturer, has reported its October 2022 delivery numbers, showcasing a mixed performance between its main brand and its sub-brand, Onvo. While the Nio main brand experienced a decline in deliveries, the Onvo brand saw a significant surge, highlighting the company's diversification strategy and its efforts to cater to a broader range of consumers.

Nio Navigates Shifting Tides in the EV Market

Nio Main Brand Faces Headwinds, Onvo Soars

Nio's main brand delivered 16,657 vehicles in October, a decrease of 18.14% from September. However, the company's Onvo sub-brand delivered a remarkable 4,319 vehicles, an impressive increase of 419.11% from the previous month. This contrast in performance underscores Nio's strategic approach to addressing the evolving needs and preferences of the EV market.The Onvo brand, which was launched in September, is aimed at the price range of RMB 200,000 to RMB 300,000, positioning it as a more affordable option compared to the Nio main brand's focus on the high-end market of RMB 300,000 to RMB 600,000. This diversification strategy has enabled Nio to tap into a broader segment of the EV consumer base, catering to those seeking more accessible yet still premium electric vehicles.

Nio's Cumulative Deliveries Surpass 619,000 Units

Despite the mixed performance in October, Nio's overall year-to-date (YTD) deliveries have been impressive. The company has delivered a total of 170,257 vehicles in the January-October period, representing a 35.05% increase compared to the same period last year. This includes 165,106 vehicles under the Nio brand, up 30.97% year-on-year, and 5,151 vehicles under the Onvo brand since its inception.As of October 31, Nio's cumulative deliveries since its inception have reached an impressive 619,851 vehicles, with 614,700 under the Nio brand and 5,151 under the Onvo brand. This milestone underscores the company's sustained growth and its ability to navigate the dynamic EV market.

Onvo's Production Capacity Ramp-up and Expansion Plans

Nio's founder, chairman, and CEO, William Li, has outlined the company's production capacity plans for the Onvo brand. The Onvo L60 SUV, the brand's first model, is expected to have a production capacity of 5,000 units in October and 10,000 units by December. By January 2025, the model's capacity is projected to reach at least 16,000 units, with the potential to increase to 20,000 units by March.To support this growth, Nio currently has two vehicle assembly plants in Hefei, Anhui province, with the capacity to produce 10,000 units of Nio brand models and 20,000 units of Onvo models each month. This capacity planning is the result of extensive communication with the company's supply chain partners, which began in the first half of 2022.As of October 31, Onvo has already established 166 Onvo Centers and Onvo Spaces in 60 cities, demonstrating its commitment to expanding its sales, service, and battery swap station network to serve its growing user base and drive long-term growth. Nio's extensive battery swap station network, with 2,625 stations currently available in China, will also be a key asset in supporting the Onvo brand's expansion, with 1,000 stations expected to be compatible with Onvo by the end of the year.

Onvo's Competitive Pricing and Battery Rental Scheme

The Onvo L60 SUV, the brand's first model, is priced at RMB 206,900 (approximately $29,040) including the battery pack, which is RMB 43,000 less than the current starting price of the Tesla Model Y in China. Additionally, under Nio's BaaS (battery as a service) battery rental scheme, the Onvo L60 can be purchased at an even more affordable starting price of RMB 149,900, with monthly battery rental fees ranging from RMB 599 to RMB 899, depending on the battery pack capacity.This competitive pricing strategy, combined with the battery rental option, positions the Onvo brand as an attractive alternative for consumers seeking a premium EV experience at a more accessible price point. This approach aligns with Nio's goal of expanding its reach and making electric mobility more accessible to a broader segment of the market.

Nio's Onvo Brand Poised for Continued Growth

Nio's October 2022 delivery numbers have showcased the contrasting performance of its main brand and the Onvo sub-brand. While the Nio main brand faced a decline, the Onvo brand experienced a remarkable surge in deliveries, highlighting the company's successful diversification strategy.With the Onvo brand's competitive pricing, battery rental options, and ambitious production capacity plans, Nio is well-positioned to capture a larger share of the EV market and cater to a wider range of consumers. The company's extensive battery swap station network and its commitment to expanding the Onvo brand's sales and service infrastructure further strengthen its ability to drive long-term growth.As the EV industry continues to evolve, Nio's strategic approach to addressing the shifting market dynamics, coupled with its innovative product offerings and customer-centric initiatives, positions the company as a formidable player in the global electric mobility landscape.