China’s Nio cuts prices, ends free battery swaps as sales plummet

SHANGHAI, June 12 (Reuters) – Nio ( 9866.HK ) said on Monday it would cut prices for all its models and end free battery replacement services for new buyers, as the Chinese electric car maker faces mounting pressure over revenue losses and tepid sales.

Nio will cut prices by 30,000 yuan ($4,200) for all models, including the facelifted ES6 and ES8 SUVs from June 1[ads1]2, according to a company statement. This corresponds to discounts of 6% to 9% on Nio cars.

The company will also no longer offer free battery replacement services to buyers who make deposits on Monday and beyond, it said.

More than 40 car brands operating in China, including BYD ( 002594.SZ ) and Volkswagen ( VOWG_p.DE ) have joined a price war started by Tesla ( TSLA.O ) this year in a battle for market share as demand for cars declines, with ripples spreading throughout the country’s wider automotive industry.

“The adjustments had been discussed internally for some time and we took advice and suggestions from some users,” Nio CEO William Li said on the company’s social media app, referring to the price cuts and the new battery replacement policy.

“It’s the best timing to publish it … but we can’t please everyone,” he said.

Nio had offered the exchange services for free at least four times each month to existing owners. It is among only a handful of electric car makers banking on battery swapping as a key power option for EVs, while main rival Tesla ( TSLA.O ) has dismissed battery swapping as “fraught with problems and not suitable for large-scale use”.

Nio said in February that it would accelerate the expansion of its batter exchange network with a plan to build 1,000 exchange stations in China this year to bring the total number of such sites to 2,300 by the end of the year.

However, the loss-making company’s investments in battery swapping stations have been questioned by investors to drag on profitability. Net loss reached 4.7 billion yuan in the first quarter, compared with 1.8 billion yuan in the same period a year earlier.

Nio sales fell in April and May as the price war in China intensified and overall demand weakened. With its pure electric cars priced above 300,000 yuan, Nio delivered 43,854 cars in the first five months.

By comparison, Tesla’s sales in China were more than five times Nios’s in the same period, while BYD ( 002594.SZ ) sold 923,343 cars, thanks to its offerings of both pure electric and plug-in hybrids for less than 300,000 yuan.

Shares of Nio in Hong Kong rose almost 5% on Monday. The shares have fallen almost 20 percent so far this year.

($1 = 7.1388 yuan)

Reporting by Zhang Yan, Brenda Goh; Editing by Kim Coghill and Tom Hogue

Our standards: Thomson Reuters Trust Principles.

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