On Monday, NYSE-listed premium electric vehicle startup Nio announced a 30,000 yuan ($4,200) price cut for all models.
BYD, a 28-year-old Shenzhen-based business famed for its inexpensive hybrid plug-ins, leads the world’s largest auto market’s EV price war.
According to CPCA data, the Warren Buffet-backed manufacturer shipped 600,000 vehicles from January to April, giving it 35.3% of the “new energy” market, including battery electric, plug-in hybrid, and hydrogen fuel-cell vehicles.
Nio sold just under 40,000 units in the first four months and had a 2.3% NEV market share. Since 2014, the EV producer has targeted high-end consumers with its $70,000 model. Nio has installed roughly 1,500 battery switching stations and has discounted its cheapest model to 228,000 yuan ($32,000) on a battery-as-a-service basis.
Nio’s price reduction came two months after founder and CEO William Li stated that the company’s low gross margin prevented it from joining the price war and that blindless pricing cuts would lead to unhealthy competition. Tesla has discounted its Shanghai-made cars by 50% in China.
Sales increased for the American automaker. According to CPCA, Model Y made up 10% of China’s EV exports in the first four months and had a 60% sales surge. Over 40 car manufacturers followed its aggressive price cuts, leaving Nio no choice.
Along with the $4,200 markdown, Nio is stopping its free battery-swapping for new buyers. Price incentives may help its ailing business, which lost $690 million in the first quarter of 2023.
