Nio’s Firefly prepares for takeoff with a SAIC veteran at its helm

In 2022, after six rounds of discussions with three senior executives at Nio, Daniel Jin made the leap to join the company. Jin brought over 15 years of experience from SAIC Motor’s technical center and SAIC General Motors, where he had played pivotal roles in the development of vehicles like the MG3 compact car, Buick Verano, GL8, and Cadillac CT5. The shift toward smart electric vehicles in China’s automotive landscape presented Jin with an irresistible opportunity: designing a platform for a global audience.

Upon joining Nio, Jin was appointed president of Firefly, a new sub-brand under the company’s umbrella. Now, after more than two years of meticulous planning, Firefly is set to debut on December 21 during Nio Day, unveiling its first model.

Firefly marks Nio’s third automotive brand, joining its flagship line and Onvo. Positioned in the high-end compact car market, Firefly aims to rival premium players like BMW’s Mini and Mercedes-Benz’s Smart. However, its approach deviates from traditional value-driven strategies. Instead, Firefly offers a premium alternative with an estimated starting price of RMB 150,000 (USD 21,000). Nio’s battery-as-a-service model could make this pricing even more accessible by lowering initial purchase costs.

Jin revealed that Firefly’s rollout in Europe would closely follow its debut in China. The brand’s first vehicle is slated to hit the Chinese market in the first half of 2025, with a European launch expected one quarter later.

China’s high-end compact car segment remains relatively niche, with foreign brands like Mini and Smart maintaining their dominance through brand equity and achieving monthly sales of over 3,000 units. Still, fierce local competition has forced price cuts, as evidenced by Mini’s recent reduction of over RMB 40,000 (USD 5,600).

This landscape poses significant challenges for Firefly. Yet, Jin remains optimistic. “The high-end compact car market is still in its infancy,” he noted. “The rise of smart EVs has redefined many niche segments. The supply side has considerable room for improvement.”

Firefly’s development emphasizes three core attributes: trustworthiness, agility, and ingenuity. Jin elaborated:

Nio’s entry into the high-end compact car market aligns with its global ambitions. At Nio Day 2021, the company outlined plans to enter at least 25 international markets by 2025. The Firefly project, revealed in August 2022, is a cornerstone of this strategy.

Jin’s market research underscored the global adaptability of high-end compact cars. “In Europe, compact cars dominate the mainstream market, with annual sales exceeding 4 million units,” he said. From its inception, Firefly has been engineered with diverse global market demands in mind. For instance, separate chassis calibrations were developed to suit the preferences of Chinese and European drivers.

Charging infrastructure is another area where Firefly demonstrates flexibility. In China, it will offer both charging and battery-swapping options, with dedicated swap stations tailored to Firefly’s smaller battery size. Deployment will be demand-driven. For overseas markets, Nio plans to collaborate with local partners to establish similar systems.

Jin envisions Firefly’s sales gaining momentum gradually in international markets. “In the short term, China will remain our primary focus, but the growth potential abroad is tremendous,” he said. Firefly embodies Nio’s ambition to penetrate a broader global market, but the brand’s expansion must also align with Nio’s goals of achieving higher development efficiency and solid returns on investment.

Despite being a new venture, Jin emphasized that Firefly’s actual investment is smaller than public perception suggests. The team comprises fewer than 1,000 members, with many technical systems and capabilities repurposed from Nio’s existing resources.

Nio has established stringent, return-oriented criteria for Firefly’s performance. As Jin put it:

The following interview has been edited and consolidated for brevity and clarity.

36Kr: How does defining a niche market differ between your time at SAIC-GM and now at Nio?

Daniel Jin (DJ): It’s completely different. Over the past 5–6 years, electrification and intelligence have redefined nearly every market segment, reshaping the entire automotive landscape in China and globally. At SAIC-GM, the most important aspect was the powertrain. It required high technical expertise, long development cycles, and a front-loaded process, starting six months to a year before the vehicle itself. This made traditional vehicle development a 4- to 5-year process.

With electrification, the complexity of powertrain development has been significantly reduced, and its cost premium has also dropped. The revolution in intelligent driving and cockpit experiences has made cars more like consumer electronics. Additionally, the smart vehicle features and frequent over-the-air (OTA) updates can extend the lifecycle of vehicles by continuously delivering the latest functions.

When it comes to compact cars, our priority is getting intelligence right. In China, compact cars serve two primary groups: affordable commuter cars that emphasize cost performance and premium compact cars like Mini, which rely on brand equity. Recently, Mini has had to lower prices significantly. We see room for improvement in intelligence for these vehicles.

As smart EVs become more widespread, we believe there’s still a great opportunity for compact cars. In the past, people bought compact cars because they were cheap. But now, in an era of personal mobility, compact cars are increasingly about self-expression and individual enjoyment. The use cases for compact cars are plentiful, but the market lacks truly great offerings.

36Kr: You left your position at SAIC-GM to join Nio. What convinced you to make that move?

DJ: I spent a decade working at SAIC-GM, but in 2022, I chose to join Nio for two key reasons:

36Kr: The compact car market is crowded with competitors like the electric Mini and BYD’s Ocean series. What sets Firefly apart?

DJ: We don’t compete with them directly. Our approach prioritizes quality performance over cost performance. We aim to deliver the highest safety standards in this segment, with a focus on advanced intelligence and exceptional space utilization.

36Kr: William Li noted that Onvo and Nio share only a 2% audience overlap. So, what level of overlap is anticipated between Firefly and Nio?

DJ: We don’t define a strict age demographic for Firefly. It’s designed for urban commuting, making it an ideal second car for current Nio users. In the early stages, we anticipate a significant overlap with Nio’s customer base.

Over time, we aim for Firefly to expand beyond this initial group and appeal to a broader audience. Its target users include families seeking a second vehicle, young professionals purchasing their first high-quality car, and affluent older adults. With shrinking household sizes and declining birth rates, the compact car’s versatility positions it as an appealing option across a diverse range of demographics.

36Kr: Many EVs prioritize low-cost, high-spec strategies. What sets Firefly apart? How do you approach making tradeoffs?

DJ: Tradeoffs are essential when developing a compact car. For instance, striking the right balance between handling and comfort, design and space, weight and energy efficiency, and cost constraints versus user value demands careful decision-making. With compact cars, where cost boundaries are inherently tight, achieving this balance becomes even more critical.

Our approach revolves around three core principles: trustworthiness, agility, and ingenuity:

36Kr: Nio has extensive technical resources. What aspects of Firefly required customization?

DJ: Firefly operates under even tighter cost constraints than Onvo, so my primary focus has been achieving the right balance between cost and quality. We’ve devoted significant effort to “making the most of a small shell,” with innovative engineering in areas like flooring, seat details, and color and texture design to maximize the sense of space and safety.

36Kr: Price wars are heating up. How does Firefly balance cost control with high quality and safety?

DJ: It’s impossible to excel in every area. Rather than competing on features like built-in appliances or more seatroom, we concentrate on refining details that matter most—such as intelligent driving interfaces, interaction precision, and experience continuity. For example, while we don’t rely on physical buttons, we’ve designed an interface that mimics their tactile feel, providing a familiar and satisfying user experience.

36Kr: Developing larger vehicles may present fewer cost challenges. How have you adapted to working on a compact car after joining Nio?

DJ: Car development always comes with challenges, regardless of size. The key is making the right tradeoffs. These decisions depend heavily on the specific project. Successful car models focus on showcasing key strengths while minimizing noticeable weaknesses. Striking this balance is critical.

36Kr: What’s your forecast for the high-end compact car market? How large do you think it could become?

DJ: While high-end compact cars might not achieve monthly sales of 10,000–20,000 units, reaching several thousand units per month is entirely feasible.

The market is still underdeveloped, primarily due to supply-side limitations. Many consumers remain hesitant to choose low-cost, high-value compact cars. Currently, the intelligence offered by Mini and Smart doesn’t meet the expectations of most Chinese consumers.

36Kr: As a compact car, will Firefly require adjustments to Nio’s battery-swapping infrastructure?

DJ: Firefly will feature its own dedicated battery swap station design. These stations are compact—about the size of a shipping container—making them highly flexible and efficient. At the same time, we fully leverage Nio’s existing swap station deployment capabilities.

To be transparent, Firefly won’t follow a preemptive station deployment strategy. Instead, we’ll expand the network in response to user demand. For urban commuting, the range of a compact car generally alleviates energy anxiety. High-speed charging and conventional charging solutions are sufficient. The battery-as-a-service model also extends battery lifespan and enhances vehicle resale value.

36Kr: What are your expectations for Firefly in international markets?

DJ: Firefly was designed as a global vehicle from the outset, with a primary focus on China and Europe, though it also considers other markets. Compact cars have broad applicability worldwide. While we’re optimistic about Firefly’s overseas prospects, we anticipate a longer sales ramp-up in international markets.

In the short term, China will drive the majority of sales, but the overseas growth potential is substantial. Firefly is very competitively priced before factoring in European import duties, and even with a 20% tariff, it remains highly competitive. In China, we’ve positioned Firefly as a smart, high-end compact car, while in Europe, compact cars are mainstream, with an annual market of 4 million units. Both mass-market and boutique segments present significant opportunities.

36Kr: How does Firefly compare to European gasoline-powered cars?

DJ: Firefly offers generational advantages over gasoline-powered cars. The driving and ownership experience of an electric vehicle is entirely different, with clear benefits from electrification and intelligence.

That said, Europe still has affordable gasoline cars priced around EUR 10,000 (USD 10,360). Firefly doesn’t compete in that category. Our focus is on premium compact cars, with models like the recently launched Renault 5 and Volkswagen’s upcoming ID.2 serving as our primary competitors.

36Kr: European drivers have high expectations for handling and performance. How has Firefly been tailored to meet these demands?

DJ: We’ve developed two distinct chassis calibrations—one for Europe and one for China—to cater to the specific preferences of each market. European drivers value handling precision and road feedback, so we’ve fine-tuned the suspension and steering systems accordingly. These calibrations underwent rigorous testing at our UK facilities, with a strong emphasis on detail.

36Kr: How will Firefly address charging and battery-swapping infrastructure in overseas markets?

DJ: Building battery swap stations overseas is much more challenging than in China due to longer approval processes and higher costs. To tackle this, we’ve adopted a flexible channel strategy overseas. Many of our local partners are willing to invest in our stations, allowing us to scale efficiently without bearing the full infrastructure cost ourselves.

36Kr: Are there plans to produce Firefly vehicles overseas?

DJ: For now, production will remain in China, with vehicles exported to Europe and other markets. However, once global sales volumes reach a certain scale, we may explore establishing overseas production facilities. This is an area we’re actively researching, though no decisions have been made yet.

36Kr: Firefly was initially planned to debut in Europe. Why was the launch shifted to China?

DJ: Firefly was originally envisioned as a simultaneous global launch. However, given that the vehicle was primarily developed and tested in China, it made sense to prioritize its debut here.

The delay for Europe is minimal, with the launch scheduled to follow just one quarter later.

36Kr: What are your expectations for overseas sales?

DJ: We haven’t set explicit sales targets for overseas markets yet. However, back at Nio Day 2021, we announced plans to enter 25 countries by 2025.

Firefly has global appeal. After establishing a foothold in Europe and China, we’ll adapt for other regions, such as Southeast Asia and Latin America. For now, the US isn’t part of our immediate plans.

36Kr: When Onvo introduced the L60, you conducted research with 500–600 families. What research informed Firefly’s compact car market strategy, and were there any surprises?

DJ: We conducted extensive research in France, Germany, Italy, the Netherlands, and China. European consumers place less emphasis on intelligent features compared to Chinese buyers, viewing cars primarily as functional products. However, their demand for mechanical quality remains consistent, even for smaller vehicles.

In terms of smart driving, there’s a noticeable gap between Europe and China. For example, Germany’s high-speed roads create different safety considerations. European consumers also prefer minimal cabin interruptions, which led us to develop a “light-touch” mode to reduce excessive notifications and alerts.

36Kr: Firefly’s sales projections aren’t particularly high. Does Nio have separate financial performance metrics for Firefly?

DJ: Yes, we began return assessments for Firefly this year. Once sales start next year, these metrics will become more direct. However, Firefly’s overall investment is likely smaller than many assume. The team is fewer than 1,000 people, and we’ve reused many of Nio’s existing technical resources.

For example, while our hardware development is largely independent, we’ve incorporated Nio’s intelligent cockpit system to minimize redundancies and enhance efficiency.

36Kr: After achieving several thousand monthly sales, what profit margins are expected for Firefly?

DJ: Firefly must contribute positively to the group’s gross margins. Building a premium compact car and losing money doesn’t make sense—it must be a profitable project.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Anqi for 36Kr.

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