Chinese startup launches new electric SUV that’s half the price of a Tesla Model X

Introducing the NIO ES8

A Chinese electric-car startup has unveiled its first mass-produced model, a high-performance electric SUV that will cost about half the price of a Tesla Model X in China.

On Saturday in Beijing, NIO launched its new ES8 sports utility vehicle, which will retail at only 448,000 yuan ($67,000). That’s compared with the 836,000 yuan ($126,000) price tag of a Tesla Model X. Along with the lower price, NIO founder and chairman William Li believes that a better understanding of Chinese consumers will give domestic electric car-makers like his company an advantage over foreign competitors like Tesla.

For anyone interested in a new, eco-friendly ride, the ES8 is a seven-seater SUV that comes equipped with its own in-car artificial intelligence system which perform tasks like taking photos, regulating the temperature, and communicating with the driver.

On a single charge, the ES8 has a range of 500 kilometers. To recharge, drivers can stop by a “power-swap” station where they can exchange batteries in three minutes. They can also contact a service vehicle which will travel straight to them.

NIO says that by 2020 it plans to build more than 1,100 of these “power-swap” stations in China and have a fleet of over 1,200 “Power Mobile” service vehicles. The company also will offer customers other free services, like roadside assistance and rescue.

While Li said that NIO can make a reasonable profit margin by selling the ES8 at its current price, he admits that the service infrastructure of stations and vehicles will not be profitable for some time, until the company is able to expand its customer base.

In the meantime, the company has $1 billion in investment from some of China’s biggest tech giants like Tencent to keep it afloat. NIO is one of several Tesla challengers/copycats that have emerged in China in recent years as the country has made massive investments and legislated substantial subsidies for companies building new-energy cars, turning China into the world’s electric vehicle leader.

For its part, Tesla understands well how important the Chinese market is. Earlier this year, it agreed to build a “gigafactory” in Shanghai and has also received investment and advice from Tencent as it prepares for what is sure to be a tricky showdown which has felled many a foreign company before.

The first batch of ES8s are due to be released in China in the first half of 2018. Gentlemen, start your engines.