Nio Inc., a Chinese electric-vehicle maker, has reduced the starting prices of all its models in China by CNY 30,000 ($4,200) in a bid to attract more customers amid a slowdown in sales growth. The price cut comes days after the company announced a worse-than-expected quarterly loss, and follows a recent campaign by the Chinese government aimed at boosting car purchases and clean-car adoption in rural areas. This puts Nio in a price war with other electric-car manufacturers such as Tesla Inc., as all try to secure their position in the world's biggest EV market.
CEO William Li said that the reduction in prices had been considered internally for a long time, adding, "There were many things to consider and even until 3 a.m. this morning we were still deliberating. Now is the most appropriate time." The new prices are effective immediately.
In the first three months of the year, Nio's net loss widened to CNY 4.74 billion from CNY 1.78 billion in 2019. This occurred as the company continued to face significant challenges, including a decrease in vehicle deliveries due to the COVID-19 pandemic.
Despite these setbacks, Nio still maintains its ambitious target of selling 250,000 electric vehicles this year. However, Li has hinted that the company will delay some investment, including research and development, and be more cautious regarding its European expansion. Additionally, Nio has pushed back its target for breaking even until a later date.
As of yet, there is little indication as to whether Nio’s price cut will result in a boost in sales. However, it is clear that the move, along with the Chinese government's campaign and competition from other electric-vehicle makers, is further evidence of a fiercely competitive EV market in China.