On Monday, Nio announced that its new brand will be called “Onvo” in English and “Ledao” in Chinese, coinciding with the launch of a website for the vehicle. Targeting the premium electric vehicle market and competing against major brands such as Mercedes, Nio anticipates that its new model, the Onvo L60, will rival the Tesla Model Y.
Chinese electric vehicle manufacturer Nio has forged a partnership with its more established competitor BYD to obtain batteries for a new EV brand that is positioned at a more affordable price point, aiming to take on Tesla. This collaboration was confirmed by three individuals who have direct knowledge of the arrangement.
This deal represents a significant achievement for BYD, which seeks to diversify its income streams beyond just selling its own branded EVs. It also highlights the intense price competition in the Chinese EV market, particularly concerning batteries, which represent the most substantial cost component in new electric vehicles.
Originally launched as a startup ten years ago, Nio had initially planned to manufacture its batteries internally but pivoted away from this strategy in December to focus on cost reduction and reversing its financial losses. On Monday, Nio also confirmed that its new brand would be named “Onvo” in English and “Ledao” in Chinese, unveiling a website for this car. Targeted at the premium EV segment, Nio’s Onvo L60 is expected to compete directly with Tesla’s Model Y.
Historically, Nio has primarily sourced its batteries from CATL, the industry leader. However, under the new arrangement, BYD will supply a smaller battery pack for a version of the Onvo EV, complementing CATL’s offerings, according to two sources. Additionally, CALB, another Chinese battery producer and a current supplier to Nio, will provide a larger 85-kilowatt-hour battery pack for the brand, one source noted.
In the Chinese market, EV buyers often prefer models with lower-range batteries if they are more affordable, partly due to the widespread availability of battery swapping stations like those operated by Nio, along with numerous charging options.
BYD’s battery division, FinDreams Battery, already supplies some units to Tesla’s Berlin facility and various state-owned Chinese automakers, including FAW. Although the majority of BYD’s batteries are used for its own vehicles, the Gaogong Industrial Institute, a battery industry analysis provider, noted that BYD sold only 5% of its battery output to external customers in 2023.
Furthermore, BYD is updating production lines at its facility in Wuwei, Anhui province, to manufacture battery packs specifically for the Onvo brand, as mentioned by one of the informants.
