Chinese EV maker Nio to launch its lower-priced brand Onvo on May 15

BEIJING — Chinese electric car company Nio said Thursday it will launch its lower-priced brand called Onvo on May 15.

The announcement comes amid a price war in China's highly competitive electric car market that's forced Tesla to cut prices. Xpeng, another EV startup, also plans to release a sub-brand called Mona in the next two or three months.

Nio said the first Onvo model, the L60, will be a "family-centric smart BEV priced around RMB 250,000, in the same segment as Tesla Model Y." That's about $34,600.

In contrast, Nio's SUVs and sedans currently sell for nearly 300,000 yuan or far more. Nio delivered 15,620 electric cars in April, up from 11,866 cars the prior month.

The company's CEO William Li previously told CNBC that the first Onvo car will be an SUV cheaper than the Model Y.

Nio said Onvo stands for "On Voyage," and that that the Chinese name of the brand, "Le Dao," means "Path to Happiness." The company sells cars to Europe, but didn't specify whether Onvo would be available outside China.