(Yicai) April 21 -- Nio has released the first model of its third brand, Firefly, with the Chinese electric carmaker cutting the price of the small and smart electric vehicle marque from its pre-sale period.

Nio launched the first Firefly model at a starting price of CNY119,800 (USD16,400) on April 19, down CNY29,000 (USD3,970) from its pre-sale price.

"The final pricing reflects Nio's comprehensive consideration of product gross margin, market and consumer sentiment, and the market's actual competitive dynamics," Jin Ge, president of Firefly, said yesterday. China's car market has seen several price adjustments across segments over the past six months, fundamentally reshaping consumer price expectations for EVs, he added.

"We expect Firefly's premium compact EVs to account for about 10 percent of Nio's total sales, though this will take time," noted Li Bin, founder and chief executive of the Shanghai-based company. Despite the price cut, the brand's first model maintains a reasonable gross margin, he added.

Nio's financial results attract market attention after a decade in the red, with its net loss widening 7 percent to CNY22.7 billion (USD3.1 billion) last year from the previous year, according to its annual earnings report. However, the company saw a jump in revenue and gross profit, with its gross margin reaching 9.9 percent, up from 5.5 percent in 2023.

Nio aims to turn a profit in the fourth quarter of this year, Li has stressed several times since last month. The firm's EV business is entering its harvest phase, with nine new models under its three brands -- Nio, Onvo, and Firefly -- scheduled to start deliveries this year, he noted.

"Firefly's launch marks Nio's transition to a three-brand, multi-platform operation phase, where advantages of business synergies will amplify with scale," Li pointed out.

While positioned as a premium compact EV aiming to accelerate Nio's global expansion, Firefly's overseas price has not been disclosed yet.

Firefly's overseas sales strategy, particularly in Europe, might be a "country-specific" one with a "country-specific pricing" approach, said Jin, adding that although the European market price has not been finalized, "it will be significantly higher than in China."

Nio models are priced at more than CNY300,000 and target consumers with strong purchasing power and high-performance demand. Onvo cars are priced between CNY200,000 and CNY300,000, with the marque focusing on the daily mobility needs of mainstream consumers, while Firefly autos, priced below CNY200,000, aim to attract young buyers seeking individuality and urban clients.

Editor: Martin Kadiev