China-based company latest to pick direct sales model

A startup automaker from China will be the next electric vehicle company to favor a direct sales model – at least in the U.S. and Europe.

The Aiways U5 will be sold through a leasing arm the company plans to develop, Automotive News Europe reported following the 2019 Shanghai Auto Show. This is in contrast to its dealership model in China. Electric pickup manufacturer Rivian said last month it plans to follow a Tesla-like distribution structure of direct sales when it plans to launch in 2020.

"We think we could give customers a very competitive monthly lease rate, lower than the cost of a similar car with an internal combustion engine," said Alexander Klose, lead of overseas operations, to the publication.

In Europe, the target price will be 400 euros per month (448 U.S. dollars), depending on the length of the lease. Aiways said it plans to sell the car for the in China starting from about the equivalent of 35,000 without government incentives. But the company did not elaborate on if the leasing plans would include things such as prepaid maintenance or insurance, as Care by Volvo does in the U.S. and some other countries.  

The U5 goes on sale in China later this year and in the U.S. and Europe throughout next year. Aiways plans on producing 50,000 of the SUVs in 2020. The compact SUV uses a 65-kWh battery, although the company is considering offering different battery packs for different markets.