Nio Capital plans to incubate a separate brand called Zhixing (our translation) that focuses on making luxury off-road EVs and could launch its first model at a price of around RMB 1 million ($150,000) in 2025, local media outlet LatePost reported.
Why it matters: The move could help Nio to enter a more expensive segment and extend its market reach by managing a growing portfolio of targeted brands. The Chinese electric vehicle maker already has a strong reputation among China’s upper middle class.
Details: Zhixing, an EV startup formed in early 2022, will raise a seed round of “dozens of millions of dollars” from Nio Capital, a venture capital firm founded by William Li, chief executive of the namesake automaker, LatePost reported on Monday citing unnamed sources.
- Zhixing will target affluent, adventurous Chinese customers with luxury off-road electric vehicles, planning to launch its first model at home and internationally in 2025. The sports utility vehicle will be priced at around RMB 1 million and built on the third generation of Nio’s NT platform, the report said.
- Zhixing will also collaborate with Nio for supply chain and charging infrastructure. The partnership could help the firm save a significant amount on development costs.
- The vehicles will feature an 800-volt battery system for ultra-fast charging and a swappable battery pack to access Nio’s recharging network.
- Founded by Zhao Lei, a former senior director of user experience operation at Li Auto, Zhixing is establishing teams across China, Europe, and America. It has hired Roger Malkusson, a former vice president of vehicle engineering at Nio, as head of Europe.
- On Sept. 27, Zhao officially set up Zhixing (Beijing) Information Technology Co., Ltd. with registered capital of RMB 100 million, according to the Chinese corporate information platform Tianyancha.
- Representatives of Nio and Nio Capital declined to comment when contacted by TechNode on Tuesday. Malkusson did not respond to TechNode’s request for comment.
Context: Experts say that there remains strong demand from wealthy individuals for luxury EVs in the coming years despite broader economic challenges, with several Chinese automakers venturing into the booming segment. Luxury cars priced above $80,000 will expand at a compound annual growth rate of 8% to 14% through 2031, while the markets for cars priced below $80,000 could remain relatively flat from a global standpoint, McKinsey & Company said in a report on July 8.
- BYD has made a similar move by showcasing its first two luxury car models under its new Yangwang brand on Jan. 5 and will open separate showrooms for the brand in several Chinese cities in the first quarter. GAC also said its first sports car under the Hyper marque will have a starting price of RMB 1.29 million.
- Geely completed its majority acquisition of the British sports car brand Lotus in 2017. Last October, the carmaker launched its first electric SUV, the Eletre, with a starting price of RMB 828,000. Nio Capital also has a minority stake in Lotus.
- Nio is also entering the affordable EV segment with plans to launch two sub-brands to target more price-sensitive buyers with a budget under RMB 300,000, while Nio’s namesake brand sits in the middle with a price category between RMB 300,000 and RMB 500,000.