On May 13, Chinese EV company Nio (NYSE:NIO) stock popped as the company announced the launch of its lower-priced brand, Onvo, on May 15. The first model, the L60, a “family-centric” crossover priced at around $34,600, will compete with Tesla’s (NASDAQ:TSLA) Model Y.

Nio sells upscale EV models in Europe, but it’s still being determined if the L60 or other Onvo models will be available outside China. The company will announce its Q1 2024 earnings before May end or June starts.

500,000 Production Milestone and Nio Stock

On May 9, CEO William Li and iFlytek Chairman Liu Qingfeng shared their enthusiasm for the company’s future prospects, as the company announced it would reach a key milestone of 500,000 manufactured cars.

This comes after the celebration of Hefei’s Xinqiao Intelligent Electric Vehicle Industrial Park. 

A tour of Nio’s second manufacturing facility occurred before the event started. The company revealed new models and learnings across departments. Han Jun stressed electrification, intelligence, and innovation for Nio’s future.

He urged Nio to focus on breakthroughs in powertrain, autonomous driving, and AI, and to enhance its market share and competitiveness, using the 500,000th car milestone as a new starting point.

Participants, user representatives, and technical workers jointly illuminated a column marking Nio’s 500,000th vehicle at the event.

Since its Hefei headquarters’ establishment in April 2020, Nio has developed key business entities, implemented 12 full-stack technologies, and secured over 8,700 patents. Last year, Nio skyrocketed its revenue to 55.6 billion yuan. This showed a 12.9% increase. 

Mass-Market Car Launch

On Wednesday, Nio will launch its first mass-market car, the Onvo L60 SUV, aiming for growth by lowering prices. Shares of other Chinese automakers also rose in sympathy with this upcoming announcement.

Li stated that the L60’s material costs are 10% lower than the Model Y’s. Onvo President Ai Tiecheng noted the L60’s lower power consumption enhances range and savings. He also noted that the company has analyzed Tesla models and found that they are in a good position to compete with its Model Y.

Once focusing on the premium EV market, Nio is set to target the mainstream sector for growth. Li Auto, a Nio rival in the Chinese market, launched its mass-market unit L6 SUV. XPeng is also planning to introduce its lower-priced Mona in June. 

Biden to Set Taxes on Chinese EVs

Chinese EV companies avoided the U.S. because of the 27.5% tariff. A higher tariff would discourage further expansion. China criticized the plan, calling it a politicization of economic issues.

If implemented, tariffs would protect the domestic industry, though opponents argue they hinder innovation and affordability. In the short term, tariffs won’t affect Chinese EV stocks, given their absence in the U.S. market.

As per Barron’s, U.S. consumers preferred hybrids to EVs because of their lower prices. New tariffs on Chinese EVs would exacerbate this affordability issue.

Buy Nio Stock with Caution

NIO stock fell 38% in 2024 because of the global EV industry downturn post-earnings. That’s a decline that’s certainly possible once again, particularly given the run Nio and its Chinese EV peers have been on.

If sentiment sours, this is a company that remains highly valued, and investors may look elsewhere for growth.

The thing is, the Chinese EV market remains a key growth area of focus for most EV makers. Nio has a chance to really take market share, and grow its presence in the midpriced segment. That’s where this company can really shine, as it lowers its production costs.

That said, investors who plan to buy Nio should know the risks it comes along with. If you’re a risk-taker investor, Nio can be a great addition to your portfolio. But, if you want more substantial and steady gains, other EV companies could be more worthwhile.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.