Liao Bing, founder and CEO of GAC Nio released the price range of its first EV model Hycan 007 in Guangzhou on Friday, December 27, 2019. (Image credit: GAC Nio)

GAC Nio launched its first mass-market model Hycan 007 on Friday. This is the latest move from Chinese automakers to step up their EV offensive in rivalry with global giants. GAC Nio is a joint venture between Chinese OEM Guangdong Automotive Group (GAC) and electric vehicle startup Nio.

Why it matters: GAC and Nio joined forces with the establishment of an RMB 1.28 billion joint venture in April 2018. Both companies have a small presence in the EV market. They expect to change that with the joint venture.

The biggest automaker in southern China, GAC got off to a slow start in the EV race. It posted sales of 33,600 EVs as of November this year, a mere 3% of the country’s total sales of 1.04 million units, according to figures from China Association of Automobile Manufacturers.

The alliance also allows Nio, who remains positioning itself in the upper market, to tap into a wider, more mainstream market and diversify its revenues. Nio did not reveal the income from the business deals with GAC Nio.

Details: The Hycan 007 beats the Tesla Model X by 100 km with a New European Drive Cycle (NEDC) range of 643 km (400 miles). The batteries are supplied by CATL.

Priced at RMB 260,000 ($37,200) for a base model with a range of 523 km, the five-seater SUV features a roomy interior, a smart speaker, and Level 2 assisted driving capabilities, enabled by 24 sensors and cameras.

Nio helped with the development of car connectivity functions such as music streaming and online navigation services. Also, “one-click for power,” Nio’s valet charging service will be available to Hycan owners.

The company will start making cars at a new GAC plant with a production capacity of 200,000 vehicles per year in the southern Fanyu city. Still, it set a modest delivery target of 15,000 units for the next year, said CEO Liao Bing, a former executive at GAC’s research institute.

Delivery will begin in April 2020. They will be offered through a joint service network including Nio’s delivery centers, GAC’s dealer shops, and Hycan branded storefronts,

The company secured 1,000 pre-orders with refundable deposits in less than three days in a previous trial pre-sale in October, though no updated figures were provided.

Context: Before making an alliance with GAC, Nio struck a similar deal with another local automaker Changan in early 2017, followed by the set-up of a JV with equal shares in August 2018 in the eastern Chinese cities of Nanjing.