The automotive industry in China is witnessing a significant shift as NIO, a prominent electric vehicle manufacturer, has officially unveiled its new lower-cost brand called Le Dao, aiming to capture the mid- to low-end market segment which has been largely untouched by NIOThis strategic move can be seen as a response to the increasingly competitive environment within the automotive sector, where price wars have become a commonplace battleground over the last few years.

The Le Dao L60 marks the launch of this new brand, with initial offerings priced between 200,000 to 300,000 yuanThis pricing strategy is designed to fill the gap left by NIO and cater to families seeking reliable yet affordable vehiclesAs competition heats up in the Chinese auto market, many EV companies have adopted a downward pricing strategy to grow their market share.

With the debut of Le Dao, NIO has formally initiated its downward market assault, embarking on an ambitious roadmap to increase its influence in the competitive EV landscape.

Affordable yet Profitable

As a nascent brand, Le Dao is in urgent need of a standout model to establish its credibility

On September 20, NIO's chairman, Li Bin, proudly announced, “Following last night's launch, Le Dao’s server capacity was increased fivefold, but we still experienced delays—simply put, the Le Dao L60 has received an overwhelming number of orders.”

However, details concerning the order quantity have not been disclosed, as Li commented, “We won’t reveal order numbers like other automakersAs we see our monthly deliveries, we’ll have a clearer picture of Le Dao's performance.”

The Le Dao L60, the first vehicle under the brand, comes in two configurations with a standard range battery of 60 kWh priced at 206,900 yuan and a long-range 85 kWh version at 235,900 yuanNotably, the price was adjusted downward by 13,000 yuan compared to pre-sale estimates

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If opting for the BaaS (Battery as a Service) model, buyers can start from 149,900 yuan, significantly reducing the initial cost.

In addressing concerns about lower pricing's impact on profitability, Li reiterated that, thanks to partnerships with suppliers, the Le Dao L60 is expected to maintain a healthy profit margin without incurring losses.

Targeting families, Le Dao positions its offerings differently compared to NIO, which focuses on high-end business usersLi noted that only 2% to 3% of Le Dao L60's purchasers are existing NIO customers, emphasizing the brand's appeal to a broader audience“If customers are comparing Le Dao and NIO, I’d recommend purchasing a NIO if budget isn’t a concern,” he stated.

Comfort and safety are paramount in family vehicles

The dimensions of the Le Dao L60—measuring 4828 mm long, 1930 mm wide, and 1616 mm high with a wheelbase of 2950 mm—provide ample interior space, including a panoramic glass roof and generous legroom and headroom to ensure passenger comfort.

In terms of safety, the L60 adopts a cage-like body structure that minimizes impact during collisions, protecting passengers and critical vehicle componentsThe incorporation of high-strength steel and aluminum in its frame adds additional protection, including dual anti-collision beams rated at 1500 MPa.

All L Dao L60 models come equipped with 45 active and intelligent safety support features, including an advanced automatic emergency braking (AEB) system capable of halting the vehicle at speeds up to 120 km/h at night.

Entering the family vehicle segment could mean delayed adoption for Le Dao

Rivals such as Li Auto have already established profitable family-focused cars, making it crucial for Le Dao to secure its share of this competitive niche.

Le Dao’s CEO, Ai Tiecheng, believes the family vehicle market is expansive“With approximately 22 million potential users in China and a market that scaled to over 8 million last year within the 150,000 to 350,000 yuan segment—expected to exceed 10 million by 2025—with 85% being family users, it boils down to which brand meets their needs best.”

Regarding future vehicle plans for Le Dao, Li Bin revealed that the brand will limit the number of model releases, aiming to introduce one new vehicle each yearThe next planned release is a mid-to-large-sized SUV set for next year.

NIO’s Downward Strategy

The ongoing “price war” in the Chinese automotive market has persisted for 21 months, escalating dramatically this year.

Earlier this year, BYD lowered A-class vehicle prices to a groundbreaking 80,000 yuan

Meanwhile, Tesla has adjusted prices multiple times, bringing the Model Y's starting price down to 249,900 yuan, down nearly 40,000 from last year's 288,900 yuan.

New power manufacturers have also been affected by this price war, with companies like NIO, Li Auto, and Neta slashing prices in a bid to increase market shareHowever, experts caution that indiscriminately lowering prices may harm brand reputation and impact the overall market adversely.

In response to the competition without alienating existing customers, companies have pivoted towards introducing lower-priced models with high specifications, launching low-end brands, and expanding their product price range to penetrate deeper into the market.

This year, Li Auto launched the Li L6, priced at just 240,000 yuan, the only model in its lineup officially starting below 300,000 yuan

Additionally, Xpeng’s first vehicle, MONA M03, was set at a remarkable price of 120,000 yuanFollowing suit, NIO’s Le Dao has positioned its products starting at 200,000 yuan and is also working on a third brand, Firefly, with even lower pricing.

Industry analysts assert that the price war is merely an external catalyst accelerating NIO's efforts to establish lower-end brands internallyMeeting delivery expectations now hinges on Le Dao's efforts.

In the first eight months of this year, NIO averaged monthly deliveries of 16,000 units, with Li Bin openly stating that the company’s future delivery growth is reliant on Le Dao.

Li Bin projects that Le Dao’s pricing strategy targets a market of over 8 million potential users

By leveraging BaaS and a network of battery swap stations, the offering is highly competitiveHe anticipates that, over time, production output and system scaling will allow for ambitious monthly delivery targets where Le Dao L60 aims for 10,000 deliveries per month this year, potentially increasing to 20,000 within the following months.

With the advent of Le Dao, the anticipations for monthly volume could escalate to 50,000 unitsGiven the market pressures, Le Dao cannot afford any missteps, and successful production and delivery will be its measure of performance post-launch.

In a detailed post-launch interview, Li Bin elaborated on Le Dao’s expected production ramp-up, forecasting 5,000 units by October, reaching 10,000 by December, and aiming for a single-month production of 20,000 by March next year

The second NIO factory in Hefei has the capacity to support the production of 10,000 NIO vehicles or 20,000 Le Dao vehicles per month.

"Going Head-to-Head" with Tesla

The Le Dao L60 faces tough competition in the 200,000 to 300,000 yuan price range, as numerous new entrants, including Zeekr, Li Auto, and Xpeng, have appeared this year within this segment.

During interviews, Li Bin emphasized the strong competitiveness of the 200,000 to 300,000 yuan electric vehicle segmentData shows that by the end of August, there were 78 models of pure electric vehicles in this price range, with only three achieving monthly sales exceeding 10,000 units: Tesla's Model Y, Model 3, and the Xiaomi SU7.

The Model Y has been considered a benchmark for many Chinese EV manufacturers since its debut five years ago

Despite advancements in technology that have closed the gap in aspects like intelligence, range, configurability, and cost-effectiveness, this relatively unchanged model continues to dominate sales, with 45,300 units sold in August alone.

The Le Dao L60 aims directly at the Model Y and is characterized as “the electric vehicle that can swap batteries,” with an ambition to surpass Tesla comprehensively.

In comparison, the Le Dao L60 starts at 206,900 yuan, undercutting the Tesla Model Y rear-wheel drive variant by 43,000 yuanIn terms of energy consumption, the L60 employs a self-developed 900V electric drive system, with energy use of 12.1 kWh per 100 km, only 0.6 kWh more than the two-wheel drive variant, while the Model Y consumes 14.4 kWh per 100 km.

Le Dao’s confidence in potentially surpassing Tesla is strengthened by its unique advantage—battery swapping

NIO has built over 2,400 battery swap stations, and Le Dao plans to incorporate 1,000 by the end of this year, alleviating long waiting times for EV charging and creating a competitive edge against the Model Y.

Battery swapping also allows for further price reduction; with the BaaS offering, net prices start as low as 149,900 yuanAi Tiecheng indicates that the pricing is not only aimed at Tesla but also seeks to break the price barrier of traditional fuel vehicles.

He believes that 150,000 yuan is the last bastion for traditional fuel vehicles in China, as this segment has the highest proportion of combustion engine vehiclesAccording to statistics, from January to August, there was a year-on-year increase of 5.8% in the sale of combustion vehicles priced between 150,000 and 200,000 yuan, marking it as the segment with the most significant growth in the fuel vehicle market.

NIO has long contemplated the entry into this market, but due to the overall high pricing of the NIO brand, even the ET5 starts at around 290,000 yuan