Chinese EV startup Nio said on Thursday that it is to unveil a new brand next week to join the frays in the competitive volume car segment.

The brand, called ONVO, will be launched on Wednesday, said Nio Chairman and CEO William Li.

The new brand, which will be headed by a former Disney executive, will focus on families, and its first model, the L60, will compete with Tesla's Model Y SUV.

Nio, as one of China's leading startups, saw its 500,000th model, a flagship ES8 SUV, roll off the assembly line on Thursday in Hefei, Anhui province. The company's first model, also an ES8, was produced in 2018.

Fu Bingfeng, secretary-general of the China Association of Automobile Manufacturers, said Chinese car brands are going upwards and rising to fame over the past years as the automotive sector is shifting towards electrification.

He added that Nio's achievement in the premium EV segment is "exhilarating". The startup has ranked first in terms of sales in the segment of EVs priced over 300,000 yuan ($41,500) in the Chinese market.

China is the world's largest market for new energy vehicles, whose sales rose to account for more than half of total vehicle deliveries in April.