NIO built a small car "killer"

Author | Chai Xuchen

Editor | Wang Xiaojuan

Nio's "Six-Eyed Firefly" has made a splash since its debut.

On the evening of April 19, Nio's new brand Firefly officially launched amidst much discussion, entering the market alongside Smart and BMW MINI.

The Firefly was born with built-in popularity, with its three-ringed headlights on both sides humorously referred to by netizens as "iPhone rear cameras." Nio Chairman Li Bin calmly responded that the design inspiration comes from "the birth of all things," and he even encouraged netizens to keep creating memes: "Everyone is welcome to continue their creativity."

Industry insiders are concerned that the Firefly, which is already positioned in a niche market and deviates from mainstream aesthetics, may struggle to gain market favor. Moreover, not long ago, Nio had just undergone a critical phase of internal adjustment and system restructuring, leading to confusion about the Firefly's true value to the Nio Group.

However, after the starting price of 119,800 yuan was announced that evening, the "truth is stranger than fiction" principle came into play.

According to Wall Street Journal, the day after the launch, long lines formed at stores for test drives of the Firefly, prompting the Volkswagen ID.3 project team to hold overnight strategy discussions. This "killer" small car even helped its parent brand sell cars, with Li Bin revealing that "some users came to see the Firefly and ended up buying an ET5 or ES8."

Although Li Bin chose not to disclose specific order numbers, Firefly President Jin Ge stated that the order volume met internal expectations.

It can be said that this "underdog" small car unexpectedly became a popular model for Nio. However, the current success is not enough for the Firefly to pop champagne; the team must now reshape its overseas strategy to capture a broader market share. Can this small car activate the domestic small car market and change the dominance of low-end "old man cars," becoming a contender alongside MINI and Smart?

Li Bin and Jin Ge will need to answer these questions one by one. After all, Li Bin has firmly stated that he aims to achieve profitability this year and enter the harvest season, "absolutely no boasting."

Rise to Fame

"I really didn't expect that this design would generate such a huge discussion."

During the live broadcast before the Firefly's launch event on April 19, Li Bin stated that the Firefly's "triple design" adheres to originality and is indeed highly recognizable. Netizens directly played with the memes: "iPhone triple camera," "razor," which unexpectedly stirred the undercurrents of the small car market.

When asked again about this, Firefly-related personnel responded that from the beginning of the development definition, the Firefly aimed to "be different," hoping to create a unique and unforgettable design to strengthen the brand's design language.

This pursuit of innovative design philosophy also extends to the interior, with elements like fluorescent capsule features, "glowing" seat perforation patterns, front-row makeup mirrors, and interior door handles, all forming a unified and simple design language With originality and fun at full throttle, Li Bin's ambition is aimed at the light luxury small cars of BBA, "More MINI than smart, more smart than MINI, this is the competitiveness of Firefly." Li Bin's statement anchors two top-tier "officially paired" competitors.

In fact, the small car market cannot bypass the BMW MINI, which is almost a classic symbol of small cars in the era of fuel vehicles, while the era of electric vehicles has given Mercedes-Benz's smart the possibility to redefine classics.

However, after its launch, how much Firefly's sales can actually reach has become the most concerning issue for the market. It is worth noting that whether it is MINI, Smart, or refined concept small cars like ZEEKR X, they all seem to struggle to escape the fate of being niche, with most models' monthly sales remaining in the three-digit range.

Among them, the smart #1 has an average monthly sales of over 2,000 units; the pure electric MINI's price has dropped from 190,000 yuan to the current 148,800 yuan, and its sales have just surpassed 1,000 units. In the same class, the only small car with monthly sales exceeding 10,000 is the Volkswagen ID.3, whose advantages include a bare car price reduced to 110,000 yuan, along with handling labels and "German flavor" chassis tuning.

In contrast, the small cars that are currently selling well are the SAIC-GM-Wuling Bingo, Geely Xingyuan, Xingjian 7Em-i, BYD Seagull, and other "budget price warriors," all priced around 60,000 to 70,000 yuan, with their top configurations not exceeding 100,000 yuan. In fact, the A0-level market has become increasingly brutal, with the former sales champion BYD Dolphin being pushed off its throne by competing products cutting prices, resulting in a significant sales decline of over 40% last year.

This reveals a serious polarization in the A0-level small car market—light luxury refined small cars cannot break the "niche scale curse," while products that aggressively cut prices firmly control the segmented track. In such a dilemma, the newcomer Firefly unexpectedly broke the circle.

"After the release of Firefly, many small car users 'slapped their thighs,' especially ID.3 users. After experiencing it, they found that Firefly's loading capacity, driving feel, interior atmosphere, and intelligence completely surpassed ID.3," a person close to Nio revealed to Wall Street Insights.

A person close to the Volkswagen brand disclosed that last month, the 2025 model ID.3 smart version launched by SAIC Volkswagen, which used lithium iron phosphate batteries, increased the car's weight by over 200 kg, compromising the core driving feel. The project team worked overtime to discuss countermeasures on the night of Firefly's launch.

"Now MINI and smart are already associated with Firefly. Last year, many potential users of the former were waiting for Firefly's release. If ID.3 is also affected, naturally, BYD Dolphin will also be associated with Firefly," a person close to Firefly revealed.

This means that after successfully anchoring the mindset of MINI and smart users, Firefly has penetrated into the most stable segment of the domestic small car market with its pricing. It is worth noting that Firefly's killer feature, the BaaS rental battery version, has not yet been launched.

"Our cards are not all played at once; from now on, the period from May to July is the first wave of a small user peak. Starting in August, playing the BaaS card will create a second small peak," Jin Ge told Wall Street Insights

Opportunities

After gaining immense popularity, the industry is curious about what exactly the Firefly has done right. The answer lies in the personalized needs for small cars, which have been suppressed by market supply for too long.

"I believe the issue in the A0 segment is not on the demand side, but on the supply side. I believe its supply is insufficient." In an interview at the press conference, Jin Ge told Wall Street Insight.

Insiders revealed to Wall Street Insight that they found many users of large SUVs like the Li Auto L8 and NIO ES8 purchased a Firefly. Research showed that these consumers originally had a desire to buy a small car, but after comparing models like the BYD Dolphin and Great Wall's Cat, they felt something was missing; these products did not fully understand the users' needs.

In other words, many users want a nimble and personalized small car, but it seems difficult to find options beyond smart and MINI. Moreover, the main price range for the latter is concentrated around 200,000 yuan, which objectively limits the release of many demands. This has clearly created a gap in the market, and under the self-satisfying demands of the new energy era, it presents a window for a reversal of the landscape.

For the newly entered Firefly, how to firmly occupy the market with the most precise resources is the key issue.

As a new product from NIO that focuses on being refined and affordable, the Firefly is bound to attract both existing NIO users and consumers of refined consumerism who are eager to try it out, and this impulse has certain consumer reference points.

With ten years of experience in the high-end pure electric market, NIO will allow the Firefly to achieve comprehensive high-end product, service, and community integration for small cars for the first time. It will share NIO's sales network and integrate with NIO's community points system, inheriting NIO's advantages in brand and service.

It can be said that the Firefly, standing on the shoulders of NIO, is conducting a "dimensionality reduction attack" on the existing traditional small car market. Another key point is that Li Bin has called out the slogan of "making the safest small car," directly addressing the pain points of A0-level users.

Perhaps many users, when comparing parameters, have not noticed that the length of the Firefly is not exactly 4 meters or 3999 millimeters, but 4003 millimeters. This is a proactive choice by the Firefly.

It is important to know that in the C-NCAP new car safety assessment system, 4 meters is a clear dividing line: vehicles under 4 meters are classified as microcars, with relatively lenient testing items and difficulties; those over 4 meters are considered standard passenger cars and must undergo a complete set of more comprehensive and stringent collision assessments.

This means that once the length exceeds 4 meters, the development costs of the vehicle will increase accordingly. From a development perspective, every millimeter change in vehicle length will bring about structural logic changes. Front space, airbag layout, crash beam size, energy absorption paths, rigidity separation, weight balancing... the entire safety structure of the vehicle must be recalculated.

From the perspective of most manufacturers, structural safety indicators are often hidden behind the scenes; they do not have the tangible feel of appliances like refrigerators, televisions, and sofas, and users may not understand the complex systems behind these structural safety features, making it naturally difficult for them to pay a premium for it.

However, this does not mean that the safety of small cars should not be taken seriously. On the contrary, in typical scenarios such as frequent commuting, urban shuttling, family pickups, and novice driving, small cars bear a high proportion of trust. Therefore, from the project's inception, the Firefly has aimed to meet the most stringent collision standards In terms of structural materials and testing conditions, it exceeds many mid-to-large SUVs priced over 300,000 yuan.

Therefore, the Firefly stands out in the current small car market, thus gaining market opportunities of "seeking higher to achieve mid-range" and "seeking mid-range to achieve lower."

Feedback

Currently, with the Firefly as a fulcrum, Nio is attempting to leverage two propositions: first, to break the blank of high-end products in the small car market without scale; second, to prove the feasibility of a multi-brand strategy. However, the market is concerned whether Nio's multi-brand strategy will accelerate the consumption of funds or help the company break through the performance ceiling.

Li Bin responded clearly that even with the Firefly's pricing of 119,800 yuan, there is still a certain gross profit. He stated that the commonality between different brands is much greater than people imagine, and the three brands' capabilities in electric drive, intelligent development can be shared. Many atomic capabilities can be interconnected, for example, Nio's intelligent driving, cockpit, electric drive, and seating teams can empower all three brands.

Moreover, Li Bin revealed that the Firefly's supply chain team is the original team from Nio's supply chain. He also set strict ROI assessment requirements for Jin Ge. Jin Ge previously disclosed that the investment in the Firefly is far lower than external expectations, with a team size of less than 1,000 people. At the same time, Jin Ge emphasized that the Firefly will not drag down Nio's gross profit but will make a positive contribution.

Clearly, the Firefly is not only not a "burden" for Nio but also needs to "support the family" as soon as possible. This is undoubtedly the most important point for Nio, as it urgently needs to break through the game of scale and cost in the current unpredictable market.

Currently, the market's doubts about Nio mainly revolve around the high deficit under increased R&D investment, the unexpected cooling of the Le Dao brand, and the main brand NIO having nearly 50% market share in the pure electric market above 300,000 yuan, but the total high-end market has shrunk by 5.8%, with the growth ceiling within reach. Therefore, Nio's goal of "profitability in the fourth quarter of 2025" relies on the volume growth of Le Dao and the Firefly.

This pricing revolution of the Firefly is a gamble to gain dual confidence from users and the capital market. From the current results, Nio has made the right bet. With the Firefly as a fulcrum, Li Bin is validating the "high-end technology sinking" business model and accumulating a user base for the Nio brand.

However, this is just the first step for the Firefly; its greater potential lies in overseas markets such as Europe. This card is still firmly in hand.

Last year, the global small car market exceeded 15 million units, with Europe accounting for nearly 5 million, but the electrification penetration rate was only 14.8%. As a latecomer, the Firefly targets the price range of 150,000 to 200,000 yuan (approximately 20,000 to 25,000 euros), filling the gap between the MINI COOPER (starting at 28,000 euros) and the Volkswagen ID.3 (starting at 28,000 euros), with a generational advantage in intelligence.

Jin Ge stated that the determination and plan for the Firefly to enter Europe and other overseas markets remain unchanged. Further announcements will be made at the upcoming Shanghai Auto Show.

With the launch of the Firefly, Nio has realized the plan of "three brands in ten years," covering different segmented markets with three brands. This year is a significant product year for Nio, and with the annual model launches of four main sales models and the release of the Le Dao L90, Nio's systematic advantages are finally beginning to snowball In the eyes of industry insiders, NIO is benchmarked against Mercedes-Benz and BMW, LeEco is benchmarked against Toyota, while Firefly targets MINI and smart. Currently, among global automotive groups, this is the most complete brand structure. Once this framework can create a flywheel effect, the entire NIO will accelerate into the profitable "harvest period."

Whether Li Bin's vision, which he has operated for many years, can ultimately be realized is now the most critical juncture. At this moment, sitting at the card table, he is full of confidence