GAC Nio launched its first mass-market model Hycan 007 on Friday. This is the latest move from Chinese automakers to step up their EV offensive in rivalry with global giants. GAC Nio is a joint venture between Chinese OEM Guangdong Automotive Group (GAC) and electric vehicle startup Nio.
Why it matters: GAC and Nio joined forces with the establishment of an RMB 1.28 billion joint venture in April 2018. Both companies have a small presence in the EV market. They expect to change that with the joint venture.
- The biggest automaker in southern China, GAC got off to a slow start in the EV race. It posted sales of 33,600 EVs as of November this year, a mere 3% of the country’s total sales of 1.04 million units, according to figures from China Association of Automobile Manufacturers.
- The alliance also allows Nio, who remains positioning itself in the upper market, to tap into a wider, more mainstream market and diversify its revenues. Nio did not reveal the income from the business deals with GAC Nio.
Details: The Hycan 007 beats the Tesla Model X by 100 km with a New European Drive Cycle (NEDC) range of 643 km (400 miles). The batteries are supplied by CATL.
- Priced at RMB 260,000 ($37,200) for a base model with a range of 523 km, the five-seater SUV features a roomy interior, a smart speaker, and Level 2 assisted driving capabilities, enabled by 24 sensors and cameras.
- Nio helped with the development of car connectivity functions such as music streaming and online navigation services. Also, “one-click for power,” Nio’s valet charging service will be available to Hycan owners.
- The company will start making cars at a new GAC plant with a production capacity of 200,000 vehicles per year in the southern Fanyu city. Still, it set a modest delivery target of 15,000 units for the next year, said CEO Liao Bing, a former executive at GAC’s research institute.
- Delivery will begin in April 2020. They will be offered through a joint service network including Nio’s delivery centers, GAC’s dealer shops, and Hycan branded storefronts,
- The company secured 1,000 pre-orders with refundable deposits in less than three days in a previous trial pre-sale in October, though no updated figures were provided.
Context: Before making an alliance with GAC, Nio struck a similar deal with another local automaker Changan in early 2017, followed by the set-up of a JV with equal shares in August 2018 in the eastern Chinese cities of Nanjing.
- Little is known about this JV since the establishment. A Changan executive in August said Changan-Nio will take on the responsibility of making a luxury brand for the traditional automaker, according to Chinese media reports.