Upstart Chinese electric car brand delivered more cars than Nio in 2022

BEIJING — Another budget-priced electric car brand is taking off in China, this time selling compact SUVs.

Nezha, named after a feisty Chinese mythological character, claims its car deliveries more than doubled in 2022 to surpass 152,000 vehicles. Most deliveries were of the Nezha V, a compact SUV whose post-subsidy price starts at 83,900 yuan ($12,000).

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In contrast, Nio‘s larger SUVs — with a longer driving range and many other features — start around 400,000 yuan.

However, Nio delivered more than 122,000 electric cars in 2022, up by a modest 34% from the prior year. That includes the company’s premium-priced sedans.

Nio has emphasized its focus is on the more niche, higher-end segment, but has hinted at plans to launch a mass market brand.

In an earnings call in early November, CEO William Li said the company had a meeting that day with its mass market team, which expected each model in the segment could sell more than 50,000 units a month, according to a FactSet transcript.

That’s potentially 600,000 cars per model per year.

Budget electric car Hongguang Mini has held the bestseller spot among new energy passenger cars in China, a category which includes hybrids. As of November, year-to-date sales had exceeded 370,000 vehicles, according to the China Passenger Car Association.

However, the Hongguang Mini is a tiny car compared with Nezha’s SUVs and sedans.

Nezha also said it exported about 3,500 cars in 2022. Since late 2021, the company has pushed into Southeast Asia, starting with a partnership in Thailand. Nezha, also known as Neta, has an English-language website that shows it’s looking for partners in the Philippines and Cambodia.

The company is a brand under startup Hozon Auto. As of July 2022, Nezha said it had raised nearly 10 billion yuan for its Series D, or fourth stage of fundraising after initial investment.

The Chinese government has supported the development of the domestic electric car industry. Cities have preferential policies that encourage people to switch to electric-powered cars.

And despite the drag of Covid controls on China’s retail sales in 2022, electric car sales remained a pocket of growth.

More than a quarter of passenger cars sold in 2022 through the end of November were new energy vehicles, according to the China Passenger Car Association. Monthly figures from the association typically come out in the middle of the month.

However, competition is fierce. Chinese battery and car manufacturer BYD remained a giant with sales of more than 911,000 electric cars in 2022 — about 180% more than a year earlier.

Nio’s growth in 2022 also fell behind that of Li Auto, another U.S.-listed Chinese electric car company whose SUVs are in a similar price range. However, the company’s cars come with a fuel tank to extend the battery’s driving range.