In China’s brutally competitive electric vehicle market, the latest major battle is playing out between NIO and its frenemy Li Auto, with the launches last week of their new all-electric, three-row sports utility vehicles, both targeting China’s well-off parents of multiple children families.

The relationship between the two US-listed EV makers has turned from bad to worse as a public spat erupted recently between senior executives of the companies, while their sales employees raised concerns over shortcomings in their competitors’ offerings, according to a TechNode reporter’s observations.

So far, it looks as if NIO is gaining the upper hand, as the company’s shares surged 8% on the New York Stock Exchange on July 31 following the launch of its Onvo L90, lifting its market capitalization to $4.9 billion. Shares in Li Auto meanwhile fell for the third consecutive day after its i8 SUV went on sale at a reportedly higher than expected price tag on July 29.

Why it matters: As China’s EV competition reaches the knockout stage, there is little room for mistakes for either NIO or Li Auto. The previous launches for both NIO’s first Onvo-branded model as well as Li Auto’s first all-electric car were marked by production delays and controversial designs, respectively.

• NIO’s accumulated losses since last year stood at more than $29 billion as of March. The success of the Onvo L90 would be a lifeline for the loss-making EV maker, which has announced a break-even goal for the final quarter of this year.
• Meanwhile, the lackluster performance of the Mega was already a setback for Li Auto, which had postponed the roll-out of the i8, its first battery electric SUV, for a year. The company is also facing slowing demand for its extended range hybrid SUVs.