As an old maxim goes, industries evolve through cycles of consolidation and fragmentation, and the automotive sector is no exception. After nearly two decades reshaped by the new-energy vehicle revolution, Chinese homegrown EV startups have settled on a proven strategy: rolling out multi-brand portfolios to capture segmented markets.
Multi-brand development is hardly an innovative concept, yet tapping into niche segments via new marques remains a formidable challenge.
Dating back to the internal combustion engine era some 15 years ago, domestic automakers including Chery and Geely pioneered multi-brand expansion to boost overall sales with differentiated product lines.
In 2009, Chery unveiled four standalone nameplates: Karry, Chery, Riich and Vela, covering microcars, mainstream passenger vehicles and premium commercial models. In the same year, Geely launched Emgrand, Gleagle and Englon to follow the trend, with Great Wall, Changan, SAIC and other OEMs rushing to roll out their own sub-brands. This marked China’s first major wave of multi-brand expansion, spawning the industry catchphrase: “Sire more offspring to fight market battles.”
The multi-brand boom temporarily fueled bustling market prosperity, yet overlapping positioning and fierce internal cannibalization soon triggered widespread financial losses across carmakers. By 2013, most manufacturers began streamlining their brand layouts: Chery consolidated its lineup under a single master brand, while Geely merged its scattered subsidiaries.
Starting in 2016, premium upgrading became the core industry theme, kicking off China’s second round of multi-brand development. Geely Lynk & Co, Great Wall WEY and Chery Exeed debuted sequentially, shifting away from low-end brand proliferation and focusing on upward brand penetration, laying the groundwork for domestic premium development.
The new-energy vehicle surge arrived after 2018 and ignited another brand spree. BYD built up its brand matrix comprising Dynasty, Ocean, Denza, Yangwang and Fangchengbao; Geely grouped Geometry, Galaxy, Zeekr and Lynk & Co; Great Wall set up Haval, ORA, Tank and WEY. In recent years, traditional mainstream OEMs have reversed course by pruning redundant brands to pool resources for high-end breakthroughs.
For leading EV startups including NIO, XPEV, Li Auto, Leapmotor and Xiaomi Auto, developing a second brand is no longer an optional tactic but an inevitable step to survive cutthroat stock-market competition.
China’s auto market has transitioned from volume-driven growth to stock-based rivalry, and a secondary brand offers the most cost-efficient path to lift total sales and upgrade brand positioning. Having seen fruitful results from early movers, a growing cohort of startups will trigger the third nationwide multi-brand upswing across China’s auto industry.
Part 1: Divergent Strategies for Launching Secondary Brands
Leapmotor’s second-brand plan materialized faster than anticipated, emerging soon after its premium D-series flagship D19 hit the market. At the firm’s Q1 earnings call, Li Tengfei, Vice President of Leapmotor, officially confirmed the blueprint: a new marque is in the pipeline, slated for product unveiling by late this year or next year with positioning distinctly separated from the core Leapmotor lineup.
Meanwhile, Xiaomi Auto’s secondary marque SKYNOMAD keeps gathering industry buzz. Its flagship sedan YU9 is highly likely to be rebranded as Kunlun N3 under SKYNOMAD, set for release in H2 2026 without carrying the Xiaomi badge. Targeting extended-range home-use SUVs, SKYNOMAD forms a clear strategic divide with Xiaomi’s core pure-electric high-performance portfolio and sources batteries from new supplier CALB to realize independent supply chains.
NIO’s L60 (Ledomo) and Firefly serve as typical precedents of top-tier carmakers launching affordable sub-brands. As William Li, NIO’s founder, put it: rolling out a RMB 200,000 model under the core NIO badge would alienate premium clientele and ruin its upscale positioning, and once a luxury brand slides downmarket, it can never revert to its original premium status.
The three startups adopt entirely different expansion paths: NIO expands downward from its high-end base, Xiaomi rolls out two strategically parallel brands, and Leapmotor climbs upward from its existing affordable product foundation.
Many industry observers question why manufacturers build independent new brands instead of launching standalone product series under the original marque.
XPEV’s MONA and Li Auto’s all-electric i-series illustrate the inherent downsides of in-house sublines. Though MONA delivers robust sales under the XPEV logo, its low price bracket drags down XPEV’s average transaction price and overall brand image. Similarly, Li Auto’s decades-long reputation as an extended-range pioneer shackles market acceptance of its pure-electric i lineup.
Both in-house product series and standalone second brands count as “second-child expansion” for automakers. Firms aiming for price-driven volume competition should launch independent sub-brands to shield core brand premium; cash-strapped manufacturers can prioritize customized sub-product lines to balance sales volume and profit with lower capital input. The core principle lies in matching expansion moves to available corporate resources and preset business goals.
Part 2: Is the Market Oversaturated for New Automotive Brands?
Critics argue China’s crowded auto landscape leaves no room for fresh marques and that secondary-brand investment amounts to wasted capital. According to AlixPartners’ Global Automotive Outlook 2025, 129 NEV brands currently operate in China, yet merely 15 are projected to achieve sustainable profitability by 2030 amid an annual domestic new-car sales ceiling of around 30 million units, signaling brutal stock competition ahead.
A sheer abundance of brand names does not equal saturated high-value market space. Per Brand Finance’s Global Top Automobile Brand Ranking, BYD remains the sole Chinese automaker featured among the world’s top 20 most valuable auto brands.
Premium brand equity is built over decades via solid product quality, consistent user reputation, refined aftersales service and distinctive brand temperament, just as German premium triad BMW, Mercedes-Benz and Audi cemented their iconic status in the ICE era. All Chinese OEMs now face an urgent task: carving out unique premium positioning in the electrification era.
Faced with shrinking internal-combustion vehicle demand and mounting pure-electric pressure on hybrid and extended-range models, carmakers can either consolidate resources to strengthen core brands or roll out secondary marques to seize untapped niche demand amid industrial transformation.
However, blind brand expansion spells fatal risks. Several once-promising EV brands such as Hozon Auto and Polestar-backed Jidu collapsed due to broken cash flow. The ultimate purpose of a second brand is to drive incremental sales, expand financing channels and boost corporate earnings rather than burning capital for vanity exposure. Without clear profit and cash-flow targets, new-brand projects will put enterprises’ very survival at stake, let alone capture segmented market share.
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