As criticism mounts over financial losses and lackluster sales, Chinese electric vehicle producer Nio (9866. HK) announced Monday that it would decrease pricing for all models and cease free battery switching for new buyers.
A business statement said Nio would lower prices by 30,000 yuan ($4,200) for all models, including its revised ES6 and ES8 SUVs, starting June 12. Nio automobiles get 6%–9% discounts.
It also said purchasers who placed deposits on Monday and afterward would no longer receive free battery changing.
As car demand falls, more than 40 Chinese automakers, including BYD (002594. SZ) and Volkswagen (VOWG_p.DE), have joined Tesla (TSLA.O) in a price war for market share.
“The adjustments had been discussed internally for quite a while and we took advice and suggestions from some users,” Nio CEO William Li stated on the company’s social networking app, alluding to the price decreases and battery-changing policies.
“It is the best timing to publish it… but we can’t make everyone happy,” he remarked.
Nio gave existing owners free swapping services at least four times a month. It is one of a few EV companies betting on battery swapping as a key power alternative for electric cars. However, primary rival Tesla (TSLA.O) has called it “riddled with problems and unsuitable for widescale use.”
In February, Nio announced it would create 1,000 batter switching stations in China this year to reach 2,300 by year-end.
Investors have questioned the loss-making company’s battery switching station investments for bringing down profitability. Its first-quarter net loss was 4.7 billion yuan, up from 1.8 billion a year earlier.
No sales fell in April and May as China’s price war increased and demand dropped. Nio sold 43,854 pure electric automobiles above 300,000 yuan in the first five months.
BYD (002594. SZ), which sells pure electric and plug-in hybrid cars for under 300,000 yuan, sold 923,343 automobiles in China, while Tesla sold more than five times Nio’s.
Hong Kong Nio shares climbed nearly 5% on Monday. Shares have fallen roughly 20% this year.
