Startup Takes on Tesla with Budget Electric Car

With competition on the rise in the Chinese electric vehicle market, one domestic electric car startup has undercut its Palo Alto, Calif.-based rival Tesla Inc. (TSLA) with a debut model at half the price of the Model X.

Shanghai-based NIO will begin selling its ES8 sports utility vehicle in China, offering various charging options to ease consumers’ concerns. The SUV is the company’s first car on the market and comes three years after NIO was founded. (See also: Musk: Tesla’s AI Will Be Best in the World.)

The electric ES8, which seats seven, was unveiled at a launch event in Beijing over the weekend. It has a range of 500 kilometers (311 miles) on a single charge and starts at a price of 448,000 yuan ($67,783). By comparison, Tesla’s Model X currently goes for 836,000 yuan in China, while BMW’s gas-powered X5 sells for 596,300 yuan in the country.

NIO Raises $1 Billion

NIO’s new car will include some Tesla-esque features and perks such as an in-car artificial intelligence (AI) system and a charging portal that the company says will allow drivers to change out their batteries in just three minutes.

In the world’s largest market for electric vehicles, NIO’s president hopes to target the middle class in the big cities as he expects the market to double in size in as little as four years, according to CNN. The three-year-old startup is backed by investors including Chinese internet giants Tencent and Baidu, along with U.S. venture capital firm Sequoia Capital. It has raised over $1 billion in funding as the Chinese government continues to introduce incentives for new-energy carmakers as it seeks to cut reliance on imported oil and phase out fossil-fuel-powered vehicles and curb pollution.

Tesla also plans to start production in China, where sales of new-energy vehicles skyrocketed 51.4% from January to November this year, according to Reuters. Elon Musk’s Silicon Valley-based auto company reported revenues upward of $1.5 billion in China in the first nine months of 2017, compared to $570 million over the same period last year. (See also: Tesla's Electric Truck Meets Early Success.)

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