Xpeng and NIO are entering the lower-tier markets with their products priced below 200,000 yuan. Are they the new rivals of Xiaomi SU7?

Recently, there have been reports that NIO plans to launch a third independently operated brand "Firefly" positioned in the 100,000-200,000 yuan range in addition to the NIO and ALPS brands.

Coincidentally, Xiaopeng Motors has also made similar moves. He Xiaopeng, chairman of Xiaopeng Motors, recently said that the company will establish a new brand to enter the 100,000-150,000-level car market and "will bring disruptive technological innovations in this market segment."

The launch of new brands by NIO and Xpeng means that both companies are seeking market breakthroughs and further expanding their product lines to meet the needs of more consumers.

91che believes that although Weilai and Xiaopeng hope to seek breakthroughs through a multi-brand strategy, the sinking market is not a blue ocean. The launch of a new brand requires a lot of investment, and the competition in this price range is almost a fierce red ocean. Mature car companies have already covered this price range, and car companies such as BYD and Geely have also established a strong market share in this price range. New entrants will face huge challenges.

The price range of 100,000 to 200,000 yuan covers the mainstream consumer groups in the Chinese auto market, especially young people who are buying a car for the first time and middle-class families. This group is price-sensitive and pursues cost-effectiveness and intelligent configuration. With the popularization of new energy vehicles, consumers are increasingly accepting electric vehicles. Electric vehicles in this price range are expected to attract more traditional fuel vehicle users to switch to electric vehicles.

However, in this price segment, Xiaopeng and Weilai will face extremely fierce competition. BYD, Geely, Great Wall and other brands already have a strong market position in this price range, with rich product lines, stable supply chains, and high brand awareness. How to convince consumers to give up these competing products will be one of the main challenges facing Weilai and Xiaopeng.

Both Xpeng and NIO aimed at the high-end route when they were first established. Now, the two companies need to expand the market downward while maintaining their brand value. This means that while opening up new markets, the two companies also need to make precise strategic adjustments in marketing and brand building to avoid a decline in brand tone.

Moreover, cost control is particularly critical in this price range, so they will likely need to reduce costs through technological innovation and large-scale production to remain competitive. In addition, against the backdrop of volatile raw material prices and tight global supply chains, Xpeng and NIO also need to be able to ensure the stability of supply.

In 2023, the sales of both Xpeng and NIO increased, with Xpeng delivering 141,601 new cars in the whole year, an increase of 17% over the whole year of 2022; NIO delivered 160,038 new cars in the whole year, an increase of 30.7% over the whole year of 2022. However, under the impact of the price war launched by BYD, the two companies must quickly find new growth points and provide more affordable models in the market.

In addition, for Xiaomi's first model SU7, which is about to be released, the decline of Xpeng and NIO may also have an unexpected impact on its pricing and market. The addition of two major competitors when the supply chain is still immature can be seen from this that SU7 is under great pressure to survive.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.