NIO Stock Alert: Nio unveils its first low-cost brand electric vehicle

Nio (NYSE:NOK) The stock fell 1.2% this morning after the Chinese electric vehicle (EV) maker launched the first vehicle from its new low-cost Onvo brand on Wednesday. In fact, Nio introduced the Onvo L60 SUV to compete Teslas (NASDAQ:TSLA) best-selling Model Y SUV and Toyotas (NASDAQ:TM) RAV4.

The Onvo L60 will start at $30,476 (219,900 yuan), about 12% less than the Model Y. It’s also roomier and uses 10% fewer materials than Tesla’s offering. Nio will begin shipping the L60 in September.

“RAV4 and Model Y were the benchmark for family cars in their time. As technologies evolve and people’s understanding of smart electric vehicles increases, today is the time for us to redefine the new standards for family cars,” said William Li, CEO of Nio.

The L60 will launch with Nio’s proprietary 900-volt fast-charging motor system. Its average energy consumption is 12.1 kilowatt hours (KWH) per 100 kilometers, making it slightly more efficient than the Model Y.

If you recall, the Onvo brand is intended to provide a lower-cost alternative to the brand of the same name while helping Nio expand into the European electric vehicle market.

For good reason, Nio’s product range of the same name is significantly more expensive than Tesla’s in China. Its cheapest model is about 30% more expensive than the Model 3 in the country.

NIO stock stagnates as new brand launches

Despite the promising revelation, NIO stock just can’t shake the bears. NIO is down 37% year-to-date and is among the biggest losers from this year’s electric vehicle slump.

However, not everyone is set to NIO. In fact, investment banking giant JPMorgan recently raised its rating on NIO stock from “underweight” to “neutral.” According to JPM analyst Nick Lai, Nio is likely to benefit from changes in China’s electric policy that encourage the use of electric vehicles.

Still, Nio is facing some pretty stiff headwinds, including an anti-subsidy investigation launched by the European Union and 100% tariffs in the United States

At the time of publication, Shrey Dua did not hold, directly or indirectly, any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.