Nio, the prominent Chinese electric vehicle manufacturer, has made significant adjustments in response to challenging market conditions.
The company has announced price reductions for its entire vehicle lineup and will discontinue the provision of free battery swapping services to new customers.
These strategic moves come as Nio faces mounting pressure due to financial losses and lukewarm sales. Effective from June 12, Nio will implement a price cut of 30,000 yuan ($4,200) across its models, resulting in attractive discounts ranging from 6% to 9% on Nio cars.
Moreover, the company will no longer offer complimentary battery swapping services to buyers placing deposits starting from Monday onwards. This decision aligns with the increasing competition in China’s automotive industry, triggered by Tesla’s initiation of a price war, which has had widespread repercussions on car demand.
Nio CEO William Li acknowledged that the adjustments had been extensively deliberated internally, taking into account user feedback and recommendations. While Nio had been one of the few electric vehicle manufacturers promoting battery swapping as a prominent power solution, its main rival Tesla has dismissed this approach as impractical for widespread implementation, citing numerous challenges.
Nio had previously been providing free battery swapping services at least four times per month to existing owners. In February, the company had announced plans to accelerate the expansion of its battery swapping network, aiming to establish 1,000 swapping stations in China by the end of this year, bringing the total count to 2,300.
However, Nio’s investments in battery swapping infrastructure have faced scrutiny from investors, who question their impact on the company’s profitability. In the first quarter, Nio recorded a net loss of 4.7 billion yuan, compared to 1.8 billion yuan in the same period last year.
As the price war in China intensified and overall demand weakened, Nio experienced a decline in sales during April and May. While Nio delivered 43,854 vehicles in the first five months, its sales figures pale in comparison to Tesla and BYD.
Tesla’s sales in China during the same period were more than five times that of Nio, while BYD sold 923,343 vehicles, benefitting from its diverse offerings of both pure electric and plug-in hybrid models priced below 300,000 yuan.
Despite the challenging circumstances, Nio’s shares in Hong Kong observed a nearly 5% increase on Monday, partially recovering from the overall decline of approximately 20% witnessed this year.