It’s called the Onvo L80, and some would argue that it could give Tesla and BYD some real competition by undercutting the two on price.
Nio‘s (NYSE: NIO) budget electric SUV starts at around $36,000, which isn’t the most affordable EV in China, but it competes on price with the Tesla Model Y, which is one of the top-selling electric SUVs in the Middle Kingdom. It clocks in at about $2,400 cheaper.
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Of course, that doesn’t mean it’s going to overtake Tesla this year, but it does mean that Nio has evolved into a legitimate contender in the race to bring an affordable electric SUV to market.
The battery subscription model could be a differentiator
One of Nio’s unique advantages is its battery-as-a-service (BaaS) model, which allows customers to purchase a vehicle without the battery and instead pay a monthly subscription fee to access the company’s battery-swapping network. That’s where subscribers can pull into a battery-swapping station and get their depleted batteries replaced with fully charged batteries in about three minutes.
And it seems to be a preference for Nio customers, as the latest data indicate more than 90% of initial Onvo L80 buyers chose the BaaS option. Under that model, the starting price falls to just $23,100, though customers pay a monthly battery rental fee of around $130.
That’s a significant reduction in upfront cost and suggests Nio’s battery-swapping ecosystem remains attractive to consumers despite growing competition.
A big bet on chips
The company isn’t just expanding its vehicle lineup, either. Nio is now actively establishing new subsidiaries focused on integrated circuit manufacturing and expanding its in-house chip capabilities. Over time, this could be a huge benefit.
Proprietary chips can influence vehicle performance, software capabilities, production costs, and supplier bargaining power. While deliveries remain the primary metric to watch, Nio’s ability to develop and deploy its own semiconductor technology could become another competitive advantage. However, it’ll take some time before we can get enough visibility on whether this strategy will actually prove fruitful.
That said, it does look like Nio’s overall business is improving. For Q1, 2026, Nio announced that revenue surged 122% year over year from $1.66 million to $3.7 million. Vehicle deliveries rose more than 98%, vehicle margins increased from 10.2% to 18.8%, and net loss narrowed from approximately $945 million to just $45.5 million.
