Chinese electric vehicle (EV) manufacturer Nio is planning to launch a new brand of entry-level EVs for the mass market, specifically targeted at the European market. The project is being developed through two separate initiatives – Alps and Firefly, with both working titles yet to be finalized.
Project Firefly will be designed to develop a new brand of entry-level EVs with a target price of around £23,500, which is expected to compete against models like the upcoming Volkswagen ID 2. Nio CEO William Li stated that there is a higher demand for smaller vehicles in Europe than in China.
See also: NIO Expands Operations with Two New Factories for Sub-Brands
The first European-focused model by Nio, an estate version of the ET5 saloon, is set to be launched later in 2023. However, it will be unlikely for the premium-focused brand to expand into compact cars. Instead, the new brands will be designed to start in Europe and then expand into other markets, including China.
Nio President Lihong Qin stated that for compact cars, the proportion of battery costs will be more significant than that of other cars. However, Qin believes that if Nio can outplay other manufacturers in terms of product features, power grid, and other services, they can establish their competitiveness and gain market share.
Both Firefly and Alps EVs will feature Nio’s battery-swap technology, allowing users to replace the battery in less than five minutes at special stations. However, the vehicles will be smaller and unable to use the Nio Swap Stations, requiring a separate network to be built. The decreasing cost of batteries and new cell technology are expected to help Nio manufacture compact cars more profitably, with smaller batteries than Nio’s current premium models. This, along with the use of battery-swap technology, could help to drive down pricing.
The Firefly models will be designed for the European market but manufactured in China at a factory in Anhui province. The models for the Alps brand will reportedly be priced between Firefly and Nio, and they will also be produced at the same facility. This will help to achieve greater economies of scale, with both brands sharing powertrain, platform, and battery tech. Nio has a partnership with JAC for production of its Nio-branded cars, and it is likely to strike a similar manufacturing deal for the new brands.
See also: Li Auto CEO Sees Promise in Battery Swap Model, Acknowledges NIO’s Business Strategy
Li stated that Nio’s long-term goal is to localize production in regions such as Europe and the US but would only do so when Nio has reached sufficient volume. Nio is also seeking partners to use its battery-swap technology but has yet to find any takers. Li acknowledged that this is a challenge in the premium market, as other manufacturers would have to design their cars around Nio’s battery packs.
Nio is still finalizing its plans for an entry into the UK market, likely to happen next year. Li acknowledged that the challenges of expanding into the region were greater than expected but said he was prepared to be patient, with a focus on building brand awareness and establishing Nio’s position to ensure that it has a sustainable long-term future.