Gasgoo Munich-These second brands are acting as firefighters.
By the end of 2025, Onvo’s annual deliveries reached 107,808 units. This figure meant the NIO Group posted its first quarterly adjusted operating profit in the fourth quarter of 2025.
Meanwhile, XPENG’s 2025 sales tally came in at 429,400 units — a 126% year-on-year surge. XPENG once planned to position “MONA” as a standalone second brand, but ultimately treated it as a series. In 2025, the MONA M03 model alone accounted for over 40% of sales.
Leapmotor claimed the top spot in 2025 sales among new EV players with 596,600 annual units and a 103% growth rate. It then confirmed plans to launch a premium second brand priced above 300,000 yuan during its first-quarter earnings call.
Xiaomi’s second brand, “Xuntian,” has also essentially been confirmed.
These four events, taken together, reveal a signal that cannot be ignored: After nearly a decade of operation, the first and second generations of EV startups are collectively crossing a critical threshold. As technological competition reaches its limit, brand architecture is shifting from “going it alone” to “multi-brand deployment.”
Just as traditional automotive giants are shrinking their brand matrices, why are the new players doing the exact opposite? Will the old path of “having more children” lead them back into the vicious cycle of “sibling rivalry”?
What’s the Strategy Behind the Timing of These Second Brands?
“There’s no more room to squeeze on technology.”
That phrase perhaps best summarizes the product dilemma facing EV startups today.
Over the past five years, the tech battle among startups has escalated in waves: from “electric powertrain comparisons” to “smart cockpit competition” and finally “autonomous driving computing power races.” Range has surged from 400 km to 700 km or even 1,000 km; chip computing power has jumped from a few TOPS to over 1,000 TOPS; and 800V high-voltage platforms have trickled down from flagship standard to mass-market models.
However, the marginal returns of technological catch-up are diminishing rapidly. As consumers perceive less difference between 600 km and 800 km of range, and struggle to distinguish between L2+ and near-L3 autonomous driving, the cost increases from continuing to stack specs far outweigh the potential pricing premiums.
This is precisely the industry phenomenon Leapmotor COO Xu Jun publicly criticized at the 2026 Future Automotive Pioneers Conference: homogeneity caused by spec stacking.
Leapmotor’s strategic judgment is quite representative: rather than remaining trapped in the spec war in the 150,000 to 200,000 yuan bracket, it’s better to jump out of that competitive dimension. By using a second brand to enter the premium market above 300,000 yuan, the company aims to boost profit per vehicle through a differentiated pattern of “main brand for volume, new brand for profit.”
The first driving force is the exhaustion of technological dividends, forcing a switch to the brand dimension.
Yet, not every startup has the capability to make this leap from tech to brand.
Underpinning this brand expansion is a “systemic competitiveness” quietly built by three startups. For any startup, this poses a massive organizational and resource challenge.
NIO’s approach is the most systematic: a decade of over 53 billion yuan in tech innovation, building 12 full-stack technology domains and holding over 9,000 global patents. More crucially, NIO incorporated a multi-brand strategy into its roadmap at inception. The battery swap network and charging infrastructure built over ten years have now paved a ready-made “chargeable, swappable, and upgradable” road for Onvo.
The core logic of the Onvo brand, as market analysis summarizes, is this: built on the relatively mature systemic competitiveness of a large corporation, a good product requires not just good pricing, but excellent operations.
Image Source: NIO
XPENG’s path reflects a different kind of resilience. In August 2023, it formed a strategic partnership with Didi, and officially launched MONA in April 2024, leveraging external resources to quickly enter the mass market between 110,000 and 150,000 yuan. The most critical value of MONA as a sub-brand lies in definitively ending XPENG’s long-standing reliance on single products.
The problem of “reliance on a single hit product” means sales fluctuations easily impact overall performance. Adding a brand essentially builds a “risk diversifier” for the group.
But under the shadow of XPENG’s overall sales declining 33.3% year-on-year in the first quarter of 2026, the MONA series becoming the core sales pillar has sparked concerns about “a strong child overshadowing the parent.” In the long run, if its sales share remains high, it risks solidifying a perception that “XPENG is for affordable family cars,” cannibalizing the brand premium of high-end models like the G9 and X9.
Leapmotor’s performance carries the most significant policy signal. Supporting its upmarket move is a solid track record of 71,387 monthly deliveries in April 2026, ranking first among new EV brands.
At the 2026 Future Automotive Pioneers Conference, Leapmotor COO Xu Jun framed this layout against the backdrop of “China New Energy.” As Chinese brands seize a precious opportunity to create global brands, the second brand demonstrates the company's determination and direction to move upmarket.
The second driving force is the strategic spillover that occurs after new forces have initially built systemic competitiveness.
At a deeper level, this brand expansion by startups is essentially a “market positioning” prepared for the cycle of market saturation.
According to a Wilson report, the gap between tiers in the 2025 startup replacement market has widened extremely, with a 30 percentage point difference in the retention rate (users choosing the same camp when switching cars) between leading and trailing brands. NIO sits firmly in first with a 42% retention rate, followed by XPENG at 35%.
These two sets of data reveal a brutal fact: in the premium new energy market above 300,000 yuan, NIO has established a sufficiently high brand barrier over a decade. For XPENG, the expansion of the MONA series is essentially a strategic expansion downward into the mass market.
Even more alarming is that the rules of competition for new energy brands have changed. It used to be “whoever has the better product wins,” but now it is “whoever has the more complete system wins.” And this investment in and testing of systems is precisely where the core risks of operating multiple brands in parallel lie.
Therefore, the third driving force is a strategic portfolio adjustment by new forces after the capital market recognized their “brand momentum.” They are selling off “heavy investments” in excessive technological rivalry and buying “strategic opportunities” in brand layout.
New Startups Branch Out, Traditional Automakers Cut Back: Two Different Approaches to Family Planning
Interestingly, in the two years before the startups began “expanding,” traditional automakers were engaged in large-scale “downsizing.”
Behind this contrast lies a fundamental difference in the underlying logic of their multi-brand strategies.
From 2018 to 2023, it was five years of rapid expansion in the number of Chinese automotive brands. Traditional independent brands represented by SAIC, Great Wall Motor, Geely, BYD, and Dongfeng launched one new energy sub-brand after another: IM, Rising, ORA, Voyah, Geometry, ZEEKR, Radar, Galaxy, Denza, Fangchengbao, Yangwang… At the peak, there were over 129 Chinese automotive brands.
But entering 2024, the multi-brand strategy began to exhibit typical “diseconomies of scale.”
Following the release of the “Taizhou Declaration,” Geely took the lead in initiating brand consolidation: Geometry was merged into Galaxy, ZEEKR acquired shares in Lynk & Co, and Radar was integrated into the Geely Auto Group. Geely’s moves signal a key judgment: the dividend period for multi-brand expansion has ended.
Why did the multi-brand strategy of traditional automakers hit an inflection point first?
The answer: “Birth order determines positioning.”
Traditional automakers incubate sub-brands via a “top-down” path. First comes the large group’s vehicle manufacturing platforms, supply chain capabilities, production bases, and dealer networks; only then are sub-brand concepts and stories carved out of them. These sub-brands share the group’s underlying R&D, procurement, and platform resources from the start but lack unique brand identities and differentiated competitiveness.
This leads to an awkward situation: within the same group, the price ranges of multiple brands overlap heavily, user profiles are blurry and similar, and product selling points are hard to distinguish. “Internal competition” plays out repeatedly within the group.
At the same time, the multi-brand strategy of traditional automakers faces a fatal structural problem: organizational fragmentation. When a group has 7 or 8 independent brand teams, R&D investment is scattered, marketing budgets diluted, and channel resources diverted. Against the backdrop of a large number of Chinese automakers seeing capacity utilization fall below 50%, the multi-brand layout of traditional automakers is degenerating from “strategic expansion” to “resource dilution.”
In contrast to this “top-down” brand splitting logic, the multi-brand strategy of startups presents a distinct “bottom-up” character.
Startups like NIO, XPENG, and Leapmotor all started with a single brand. They established brand awareness in the market with one or a few models before building a value perception of “brand stratification” in the minds of consumers. They deepen the tech content and brand premium of the main brand first, then extend the price range downward or upward by launching a second brand, rather than pushing multiple brands simultaneously from the start to cover all bases.
This approach has several nuances:
First, the main brand doesn’t have to “play all roles at once.” Traditional automakers often see internal friction where sub-brands and the main brand fight for the same market after expansion. But in the startup brand architecture, the price gap between the main and second brands is large enough, and product definitions clear enough, to avoid internal “sibling rivalry.” NIO focuses on the premium market above 300,000 yuan, Onvo targets the mainstream family market of 200,000 to 300,000 yuan, while Firefly focuses on high-end small cars around 100,000 yuan — three distinct layers, each with its own role.
Second, the main brand leads significantly in tech investment, while the second brand benefits from “technological advantages” by inheriting transferred technology. NIO spent a decade developing the NT3.0 platform, the Shenji autonomous driving chip, and the Sky·OS system regardless of cost. As per-vehicle R&D costs gradually lowered, Onvo “benefited from these investments,” using these tech specs for “selective application.” This drastically saved on cost per vehicle and formed a clear value ladder.
Third, the launch of a second brand achieves “risk diversification” for startups. Both Onvo and MONA have contributed significant sales and performance to their respective companies.
But behind all these advantages, startups also face a “structural fragility” that traditional automakers rarely encounter.
At Geely or BYD, the failure of a sub-brand can be balanced by others; but in the startup system, the success or failure of a second brand often directly determines the survival of the entire group.
The multi-brand model of traditional automakers is more like a “hasty birth boom,” hastily launching sub-brands to seize the new energy track. The multi-brand layout of startups, however, is a “strategic split” after a long period of policy windows and the accumulation of technical capital.
This also explains why, in 2024 and 2025, while traditional automakers were busy laying off staff, closing stores, and integrating brand matrices, NIO, XPENG, and Leapmotor were doing the exact opposite.
Regardless, “traditional automakers and new forces have the same ultimate goal: survival.”
But the way they survive differs: traditional automakers must grapple with the “dilemma of efficiency” in internal organization and resources; new forces must answer the core question of whether they can successfully operate multiple brands at once.
Analysts at Gasgoo Auto Research believe the core for startups to balance the development of their main and second brands lies in resolving the contradiction between limited resources and multi-line operations. They need to position the main brand as “defending the core foundation” and the second brand as “driving volume or achieving premium positioning.” By strictly isolating price bands and user groups from the source, they can avoid internal friction.
Analysts also emphasize that startups must maximize the sharing of underlying technology, supply chains, and after-sales infrastructure, while differentiating investment in upper-layer product experience, marketing, and sales teams. Adopting an organizational structure of “unified middle office + independent front office” and an operational model of “joint procurement + flexible production” will help build brand risk firewalls and dynamic resource adjustment mechanisms. By controlling the expansion pace of the second brand, they can ultimately achieve dual growth in scale and profit, building a long-term systemic competitive advantage.
“Multiple Brands, More Conflict”: Where Is the Limit?
One historical lesson is worth remembering: the failure of the multi-brand strategy among Chinese automakers is not playing out for the first time.
Years ago, Chery launched multiple sub-brands like Riich, Weilin, and Karry intending to cover the entire market, but ultimately suffered poor sales while consuming vast amounts of capital.
Today’s environment bears a striking structural resemblance to that time.
China currently has over 50 independent automotive groups, with 129 new energy vehicle brands competing on the same stage. Leading automakers see capacity utilization exceed 85%, while most lagging brands struggle below 40%.
Zhu Huarong, chairman of Changan Automobile, once admitted that the excessive number of brands scatters R&D resources and increases consumer choice anxiety and cognitive costs. “Brand redundancy has become a stumbling block to the high-quality development of the industry.”
So, how many brands should a startup reasonably deploy?
Judging by current market validation, a “1 main + 1 sub-brand” dual-brand structure is likely the optimal solution at present.
NIO’s “three-brand” setup (NIO + Onvo + Firefly) of “1 main + 2 sub-brands” is already slightly complex. Last year, NIO merged the delivery channels of its dual brands and integrated Onvo’s core departments into the business cluster. This organizational adjustment itself reflects the complexity of coordinating multiple brands.
XPENG is taking a “quasi-multi-brand” path. The MONA series continues to refine the product matrix, but as group resources tilt toward volume models, R&D resources for high-end models risk being diverted, facing the danger of diluted brand perception.
In contrast, Leapmotor’s strategy is more robust. It first establishes a scale advantage in the mass market of 150,000 to 200,000 yuan with its main brand, then uses a second brand to move upward into the premium market above 300,000 yuan. The rhythm of “main brand lays the foundation, second brand elevates the positioning” is handled more balancedly.
But the flip side of “multiple brands bring growth” is “multiple brands cause conflict.” The multi-brand strategy of startups is also facing unprecedented structural risks.
Risk One: “Excessive Competition and Downward Drift” between sub-brands. In fierce market competition, “cross-level competition” can easily emerge between different brands, where a flagship model from one brand threatens the base model of a higher-tier brand. For instance, when the two SUVs in the MONA series launch, will their price ranges overlap with XPENG’s G and P series? When the Onvo L90 launches below 270,000 yuan, will it exert downward pressure on the NIO series? This kind of internal brand friction is quietly eroding the premium pricing power of startups.
Image Source: XPENG
Risk Two: “Main Brand Weak, Sub-Brand Strong” caused by resource misallocation. When a group’s main sales and profit source gradually shifts from the main brand to a sub-brand, “latecomer advantage” becomes “sub-brand overshadowing the main brand.” This not only affects consumer anchoring of the parent brand but also systematically compresses the investment of core resources like tech R&D and brand marketing into higher-value segments.
Risk Three: “Exponential Decline” in organizational complexity and decision-making efficiency. NIO’s organizational turmoil during Onvo’s first year of operation fully exposed this risk: the founding president was replaced, the organizational structure was retracted to the parent company, and the frontline team was cut by 40%.
Li Auto’s experience holds even more warning. After three years of integrating its matrix development organization, Li Auto once divided its product system into three independent product lines corresponding to different price ranges. However, entering the second half of 2025, the three product lines competed for resources in the relatively narrow market above 300,000 yuan (with a market share of less than 10%). The company was forced to re-merge the product lines in early 2026, pivoting to adopt Toyota’s Chief Engineer (CE) system.
This is enough to show: the organizational complexity of a multi-brand structure can deal a devastating blow to decision quality.
The logic proposed by Changan Automobile when integrating Deepal and Avatr may represent a more pragmatic approach: maintain differentiated positioning at the front end, but strengthen coordination in mid-to-back-office functions like R&D, procurement, manufacturing, and channels.
In other words, brand independence exists primarily in the “consumer perception,” not necessarily requiring complete separation at the organizational and resource levels.
Conclusion: Multi-Branding Is No Magic Key
At this point, the new forces have reached a critical moment for collectively “having a second child.”
But “giving birth” is easy; “raising” is hard. For every startup planning to launch a second brand, at least three core questions must be answered:
First, is the main brand’s technological moat thick enough to maintain competitiveness even after resources are diverted?
Second, can the second brand maintain a clear value positioning and brand boundaries after scaling up?
Third, can the organizational efficiency of multiple brands remain agile and focused amidst complexity and cost challenges?
History has proven too many times with Chinese automakers: having more children doesn’t naturally equal greater competitiveness. Unclear brand positioning, insufficient resource preparation, and mismatched organizational capabilities will inevitably lead to internal friction and disorderly competition.
For today’s startups, the real strategic test lies not in whether to establish a second brand, but in whether they can guard the main brand’s value positioning and technological moat while “having multiple children.” That is the key variable determining the final outcome.
Against the backdrop of the Chinese auto market shifting from growth to market saturation, are multiple brands the antidote or the poison?
The answer perhaps lies not in the number of brands itself, but in whether these startups have enough capital, strong enough technology, and refined enough management to master the complex system of multi-brand operations. And for those brands that haven’t figured these questions out yet, the safest choice might not be to “act prematurely,” but to “wait for the right opportunity” and “strengthen internal capabilities.”
