For a long time, the mantra of "launching more brands to capture more market share" has been a prevailing strategy among Chinese automakers. By deploying a diverse portfolio of sub-brands covering various price segments and niche markets, enterprises strive to seize greater market shares. However, the landscape of China’s automotive industry has undergone profound changes recently, as established OEMs and emerging EV startups adopt diametrically opposite strategies toward their sub-brand layouts.
Leading traditional automakers including GAC, SAIC, Dongfeng, Chery and Geely have embarked on brand streamlining initiatives. They integrate or phase out redundant sub-brands to concentrate resources, optimize operational structures and eliminate internal frictions. On the contrary, new-energy vehicle startups are moving in the opposite direction, rushing to launch second-tier brands, making the "second child" strategy a new industry trend.
Successful precedents have validated this approach: Li Auto’s sub-brand Leida has helped NIO turn profitable by filling gaps in its market layout, while XPeng’s MONA series has pulled the brand out of operational difficulties and become its pillar for sales growth. Such achievements have made multi-brand strategies a popular solution for startups trapped in growth bottlenecks. Nevertheless, can this crisis-rescuing formula be replicated across the industry? In an era of stock market competition, are multiple brands a panacea or a potential liability for automakers?
A Rush for New Layouts: Emerging Startups Accelerate the Launch of Second Brands
Since the start of 2026, new-energy vehicle startups have intensified their efforts to roll out second brands, fueling fierce multi-brand competition across the sector. Xiaomi, Leapmotor and Seres stand out with their aggressive strategic moves.
According to industry insiders, Xiaomi Auto is developing a new secondary brand named SKYNOMAD, positioned for family-oriented range-extender SUVs. The new brand targets a similar market segment to Xiaomi’s existing product lineup and is scheduled to hit the market in the second half of 2026. Leapmotor, which has long focused on the mass-market segment, is marching toward the high-end arena with a premium second brand priced above 300,000 RMB to fill its high-end product gap; the new brand is set to debut between late 2026 and early 2027. Additionally, Seres has rebranded its subsidiary Blue Electric Technology as Seed Technology, and partnered with ByteDance’s Volcano Engine to co-launch AIVA, an all-new AI-powered automotive brand targeting the intelligent vehicle track.
The widespread enthusiasm for second brands among new startups essentially stems from benchmarking NIO and XPeng. The two pioneers have revitalized business performance and achieved profitability via differentiated product and brand layouts, offering a mature blueprint for peers struggling with sluggish growth.
Proven Blueprints: How Leida and MONA Became Game-Changers
NIO: Leida Lays the Foundation for Group Profitability
NIO once suffered a severe downturn with monthly deliveries dropping below 3,000 units, constrained by saturated growth of its high-end main brand and a blank layout in the affordable mass market. The launch of Leida completely reversed the brand’s operational predicament.
In May 2026, NIO Group delivered 37,705 new vehicles, representing a year-on-year increase of 62.3%. Among them, Leida contributed 12,029 deliveries, surging 91.5% year-on-year and 124.8% month-on-month, emerging as the core growth driver of the group. Throughout 2025, Leida accumulated 107,808 annual deliveries, steadily propelling NIO to achieve its first quarterly profit in Q4 2025.
Although the all-new ES8 has gained tremendous popularity and consolidated NIO’s leading position in the high-end market, Leida, which focuses on affordable passenger vehicles, serves as the cornerstone for NIO to bounce back from stagnation and strike a balance between sales volume and profitability.
XPeng: MONA, the Blockbuster Series Underpinning Overall Sales
Similarly, the MONA series has been a lifeline for XPeng. Back in 2024, XPeng was mired in weak revenue and sluggish sales under immense operational pressure. The release of MONA M03 marked a critical turning point; the model quickly became a runaway bestseller and drove XPeng to achieve profitability after one year of robust sales.
To this day, MONA remains XPeng’s absolute sales backbone. In May 2026, XPeng achieved 32,158 total deliveries, among which MONA M03 alone accounted for 14,160 units, taking up 44% of the group’s overall sales. The series has exceeded 250,000 cumulative deliveries. Moreover, XPeng has accelerated the launch plan for its new SUV model MONA L03 to further enrich the product matrix of the MONA line.
It is worth noting that MONA was initially planned as an independent second brand before being adjusted into a product series under XPeng’s main brand. Despite not being a standardized independent sub-brand in terms of equity and organizational structure, MONA features differentiated pricing, technical configurations and product positioning compared with XPeng’s core models, operating in a way nearly identical to a standalone sub-brand.
Hidden Pitfalls: Multi-Brand Strategies Are No Silver Bullet
The successful cases of NIO and XPeng illustrate that for current EV startups, launching a second brand is rarely a value-added bonus, but more a do-or-die move amid slowing industry growth. Nevertheless, most followers only focus on the visible successes while ignoring the underlying risks of multi-brand operations.
Automakers hold vastly different strategic purposes for launching secondary brands. Leapmotor’s high-end sub-brand is designed to break its price ceiling and climb up the market ladder, while Xiaomi’s SKYNOMAD targets the mid-range family market with positioning overlapping its existing lineup. This strategy deviates from NIO and XPeng’s downward expansion logic, proving that no universal multi-brand template fits all players.
The operational obstacles encountered by leading automakers also offer crucial lessons for latecomers. NIO once operated Leida and Firefly as fully independent sub-brands, which dispersed core resources including R&D funding, supply chain resources and sales channels. The fragmented operation not only inflated operating costs, but also triggered internal cannibalization due to overlapping pricing ranges. Facing mounting operational pressure, NIO reintegrated the two sub-brands into group-wide unified management in 2025, sharing R&D platforms and sales networks to reduce internal consumption and overheads.
XPeng also confronted the risk of "sub-brand overshadowing main brand". The explosive sales of the MONA series once diluted public attention toward XPeng’s high-end products and eroded the market share of flagship models. Fortunately, XPeng mitigated this imbalance by launching high-end products such as X9 and GX to consolidate the technological advantages and core value of its main brand.
Industry Verdict: Brand Quantity Does Not Equal Competitiveness in the Stock Era
China’s automotive industry has bid farewell to the incremental growth era and entered a brutal stock competition phase with shrinking overall market demand. Bin Li, founder of NIO, recently warned the entire industry to brace for a 15%-20% year-on-year decline in domestic retail sales, a gloomy market outlook that has further intensified operational pressures on all automakers.
Against such a backdrop, the value of multi-brand strategies has sparked heated debates. The choice between streamlining brand portfolios like traditional OEMs or expanding multi-brand layouts like new startups cannot be generalized.
Multi-brand strategies carry no inherent advantages or disadvantages. They can either help automakers explore untapped market segments and resolve operational crises, or become a resource-consuming burden that exacerbates internal friction. The determinant of success lies not in the number of brands, but in enterprises’ sufficient capital reserves, cutting-edge R&D capabilities and refined group management to govern a sophisticated multi-brand system.
The automotive market never rejects multi-brand layouts, yet all automakers need to recognize a plain truth: launching a new sub-brand takes minimal effort, but nurturing it into a profitable and sustainable player is far more challenging. It is easy to give birth to a "second child", yet incredibly hard to raise it well—blindly following the trend of secondary brand expansion will only backfire in the end.
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