Tesla Faces Stiff Price Competition In China From Latest Entrants Nio's Onvo L60 And Xiaomi SU7

China’s latest EV entrants are looking to take on Tesla Inc‘s TSLA market share within the country, with vehicles priced competitively against the American EV giant’s best-selling EVs in the country.

What Happened: China is the second largest market for Tesla after the U.S. The more popular Tesla vehicles in the East Asian country are its lower-priced Model 3 sedan and the Model Y SUV. While the competition between Tesla and Chinese EV giant BYD Co has been ongoing, newer players have now joined the race.

Onvo L60 Vs. Model Y: Chinese EV maker Nio Inc NIO on Wednesday launched its new sub-brand Onvo. The brand’s first car, the L60 mid-size family SUV was also unveiled with a starting price of 219,900 yuan ($30,427), about 12% lower than the Tesla Model Y which starts at 249,900 yuan ($34,578) in the country. The company intends to start delivering the SUV in September.

“RAV4 and Model Y were the benchmark for family cars in their time. With technologies evolving and people's understanding in smart EVs deepening, today it's time for us to redefine the new standards for family cars,” Nio CEO William Li said at the launch event.

Xiaomi SU7 Vs. Model 3: Chinese tech giant Xiaomi Corp XIACF started delivering its SU7 electric send in April. The vehicle has a starting price of 215,900 yuan (about $29,873), nearly 7% lower than the Tesla Model 3 in China. The pricier variants of the sedan, called Pro and Max, start at 245,900 ($34,024) and 299,900 yuan ($41,496), respectively. The priciest version of the Model 3, termed the Performance variant, in contrast, starts at 335,900 yuan (46,477).

Earlier this week, it was reported that Xiaomi has already delivered its 10,000th EV within 2 months of launch. Xiaomi CEO Lei Jun predicted Tesla-like success for the SU7 last month. The company intends to deliver 100,000 units of the sedan this year.

Why It Matters: In the first four months of this year, BYD sold 434,579 battery-electric vehicles and NIO delivered 45,673 vehicles. As per data from the China Passenger Car Association, Tesla sold 163,841 units in China in the meantime.

China is Tesla’s second-largest market after the U.S. The company relies heavily on sales as well as production within China to maintain its position as the global best-selling battery electric vehicle seller. The company, however, has been relying on price cuts to drive sales across its key markets in light of increased competition.

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