SHANGHAI, Nov 4 (Reuters) - Chinese electric vehicle

maker Nio is planning to launch its first hybrid model

in 2026 and will only sell it in overseas markets, including the

Middle East, North Africa and Europe, according to two people

with knowledge of the matter.

Nio to date has only manufactured pure electric vehicles. It

is building the hybrid vehicle to address challenges faced by

Chinese firms selling EVs in foreign markets, which have put up

trade barriers and been slower to install charging facilities.

Development of the extended range hybrid, under the Firefly

brand, stems from suggestions by Nio's main investor, Abu Dhabi

investment vehicle CYVN Holdings, that this could boost sales in

Middle Eastern markets, where the infrastructure is not ready

for mass adoption of EVs, said the people, who declined to be

named as the plan is private.

It is scheduled to be launched in late 2026 and delivery

will start in 2027, one of the people said. The model will not

be sold in China, where Nio would continue to offer only EVs

with batteries that can be swapped, they added.

Nio declined to comment on the hybrid model plan. The

company said that the Firefly brand would use pure EV

technology, without elaborating further.

Chinese media outlet Yicai first reported Nio's plan to

develop a hybrid model on Friday.

Nio will unveil the first model under the Firefly brand at

its annual event on Dec. 21. It is counting on the model to sell

into European's mass market with designs catering to European

consumers' preference for nimble small-sized cars.

The European Union has imposed new tariffs of more than 20%

on Nio's EVs to the region for the next five years on top of an

existing 10% import duty, which one of the sources said had

largely undermined Firefly's competitiveness.

While Chinese-made EVs are subject to the tariffs, hybrids

are still exempted, encouraging plans of hybrid exports to

Europe.

Nio received $2.2 billion in investment from CYVN Holdings

in 2023, largely relieving liquidity pressure on the Chinese

automaker, which has struggled to break even while doubling down

on its research and development efforts.

Nio agreed in February 2024 to license its EV technologies

to CYVN.