Nio Onvo to launch the L60 in Hefei, Anhui province on September 19, targeting 20,000 unit deliveries within this year.
Nio (NYSE: NIO) sub-brand Onvo will officially launch its first model, the L60 SUV (sport utility vehicle), on September 19, after the first stores opened on September 1.
Onvo will roll out the L60 on September 19, with deliveries set to begin in late September, William Li, Nio's founder, chairman and CEO, said on an earnings call yesterday.
Onvo later shared the date on its social media accounts as well, saying the launch event will take place in Hefei, Anhui province -- the city where Nio's two current factories are located.
The Onvo L60 made its debut on May 15 and became available for pre-order at a pre-sale price of RMB 219,900 ($31,000) including the battery, which is RMB 30,000 less than the current starting price of Tesla's (NASDAQ: TSLA) Model Y in China.
The model will be priced a little lower at its official launch than it was at pre-sale, Li said during yesterday's earnings call.
Like Nio-branded models, the L60 will also support battery swap and is expected to allow customers to buy just the vehicle body and rent the battery, bringing the barrier to purchase even lower.
Pre-sale orders for the Onvo L60 were ahead of expectations, Li said, and as has been the case in the past, did not disclose the exact number of orders.
Nio is aiming to deliver 20,000 Onvo L60s this year, and is working on supply chain readiness in line with delivering 10,000 units in December, according to Li.
Nio wants the Onvo L60 to reach 20,000 deliveries in a single month sometime in 2025, he said.
Onvo is targeting a market of more than 8 million units a year, with a higher volume cap, Li said, adding that a gross margin of 15 percent is a reasonable target for the sub-brand in the long term.
The long-term targets for the Nio main brand is 40,000 sales per month and 25 percent gross margin, according to Li.
To cope with the production of the new model as well as to maintain production of existing models, Nio is ramping up plant capacity.
Nio's F2 plant has begun double-shift production, and construction has begun on the F3 plant, which will go into production in the third quarter of next year, Li said.
Nio currently has two vehicle assembly plants in Hefei -- F1 and F2 -- with F1 going into full operation in 2018 and F2 in September 2022.
On June 5, Nio co-founder and president Qin Lihong told local media that Nio's third factory, located in Hefei's NeoPark, had begun construction.
The new plant, which has a single-shift capacity of 100,000 units per year, will be used for both Nio-branded and Onvo-branded products, Qin said at the time.
In terms of sales channels, Onvo opened its first 105 stores on September 1. By the end of this year, Onvo will have more than 200 stores in China, Li said on yesterday's call.
For the Onvo brand, Nio seems to be putting more emphasis on capital utilization efficiency.
Onvo's investment in individual stores, including capital expenditures and rent, is significantly lower than that of Nio's main brand, Nio CFO Stanley Qu said on yesterday's call.
The first Onvo stores that have already opened cost on average less than RMB 1 million each to renovate, and the next 100 stores will cost even less to renovate, Qu said.
($1 = RMB 7.0931)
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