Nio said on Monday it would cut prices on all of its models and end free battery swaps for new buyers, as the Chinese electric carmaker faces mounting pressure from profit losses and tepid sales . Nio will cut prices of all models by 30,000 yuan ($4,200) from June 12, including its revamped ES6 and ES8 sports utility vehicles, according to a company statement. This equates to discounts ranging from 6% to 9% on Nio cars.
The company also said it would no longer offer free battery replacements to buyers who deposit on Monday and later.
More than 40 auto brands operating in China, including BYD and Volkswagen, have joined Tesla in a price war for market share launched this year that has rippled through the broader auto industry across China as demand for cars slumps.
Also read: China launches ‘war’ to boost car sales in world’s largest car market
“These adjustments have been discussed internally for a long time, and we have listened to some users’ opinions and suggestions,” Nio Chief Executive William Li said on the company’s social media app, referring to the new policy on price cuts and battery swaps. “Now is the perfect time to release it…but we can’t make everyone happy,” he said.
Nio offers at least four free car exchanges per month to existing car owners. It is one of a handful of EV makers betting on battery swapping as the primary powering option for EVs, while archrival Tesla says battery swapping is “problematic and unsuitable for mass use.”
NIO said in February that it will accelerate the expansion of its battery swap network, and plans to build 1,000 battery swap stations in China this year, bringing the total to 2,300 by the end of the year.
However, the loss-making company’s investment in battery swap stations has been questioned by investors as a drag on its profitability. The net loss in the first quarter was 4.7 billion yuan, compared with 1.8 billion yuan in the same period last year.
Nio’s sales fell in April and May as the price war intensified in China and overall demand weakened. With more than 300,000 yuan of pure electric vehicles, NIO delivered 43,854 vehicles in the first five months.
By comparison, Tesla’s sales in China were more than five times that of Nio’s during the same period, while BYD sold 923,343 vehicles thanks to its offering of pure electric and plug-in models for less than 300,000 yuan. hybrid car.
NIO shares rose nearly 5% in Hong Kong on Monday. The stock has fallen nearly 20% so far this year.
First published date: Jun 12, 2023 at 10:18 AM CST