NIO to launch affordable Model 2 competitor globally as Chinese EV makers have 20% cost advantage over Tesla

After Tesla's main competitor BYD released the Seagull, yet another bestselling Chinese electric car maker - NIO - will be launching its first mass market EV to take on Tesla's rumored Model 2, or VW's already announced ID.2all. NIO's founder Li said in an interview that not only will it release an affordable electric car but will also launch it globally, including in Europe, in a direct competition with the VW ID.2all and the like there. Just like VW's cheap EV, it will cost under 30,000 EUR, and "in terms of price that means we are also attacking Volkswagen more strongly than before," added NIO's chief without going into further details.

As these things go, this likely means that its starting price in China may be almost half of the European tag, given all the fees and import duties that Chinese automakers pay when launching their models abroad. The compact BYD Atto 3 electric SUV, for instance, doubles its price until it gets from China to the European markets.

Not long ago, NIO's chairman warned that Chinese automakers must be prepared for their production cost advantages to be erased by duty taxes and other protectionist measures when they expand globally. According to him, Chinese EV makers like BYD, NIO, XPeng, and many others, now have a 20% manufacturing cost advantages even when compared with an efficiency powerhouse like Tesla.

After all, China's government policies have been preparing it for the EV era longer than anyone by investment in battery raw materials and refining, and its companies have a firm grip on the supply chain to which the US is only now reacting with federal incentives like the made-in-US new EV subsidy requirements in the Inflation Reduction Act.

In any case, the affordable NIO EV which will be taking on the likes of VW ID.2all, or the eventual Tesla Model 2 next year, may be none other but its rumored Firefly sedan with a starting price of US$15,000 in China. NIO has reportedly already picked the Firefly's factory site and will be racing Tesla against the Model 2 production in Giga Mexico that is allegedly planned to start next year.

The Firefly brand is said to be export-oriented and the first affordable mass market EVs from the new factory are expected to hit the global market in Q3 of next year, perhaps in sync with the Model 2 launch, and a year before the VW ID.2all hits the showrooms.

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