Nio said on Monday it would lower prices for all its models and end free battery swapping services to new buyers, as the Chinese electric vehicle maker faces mounting pressure over earnings losses and lukewarm sales.
Nio will cut prices by 30,000 yuan ($4,200) for all models including its revamped ES6 and ES8 sports utility vehicles from June 12, according to a company statement. That equates to discounts ranging from 6% to 9% on Nio cars, reports Reuters.
The company also would no longer provide free battery swapping services to buyers who place deposits on Monday and onwards, it said.
More than 40 auto brands operating in China including BYD and Volkswagen have joined a price war started by Tesla this year in a fight for market share as car demand slumps, with ripples spreading throughout the country’s wider automotive industry.
“The adjustments had been discussed internally for quite a while and we took advice and suggestions from some users,” Nio Chief Executive William Li said on the company’s social media app, referring to the price cuts and the new policy on battery swapping.
“It is the best timing to publish it … but we can’t make everyone happy,” he said.
Nio had been offering the swapping services for free at least four times each month to existing owners. It is among only a handful of EV makers betting on battery swapping as a major power option for electric cars while main rival Tesla has dismissed battery swapping as “riddled with problems and not suitable for widescale use”.
Nio said in February it would accelerate expansion of its batter swapping network with a plan to build 1,000 swapping stations in China this year to bring the total number of such sites to 2,300 by year-end.
The loss-making company’s investments in battery swapping stations, however, have been questioned by investors for dragging on its profitability. Its net loss reached 4.7 billion yuan in the first quarter, compared to 1.8 billion yuan in the same period a year earlier.
Sales of Nio slid 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 vehicles in the first five months.
In comparison, Tesla’s China sales were more than five times Nio’s over 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 nearly 5% on Monday. The shares have slumped nearly 20% so far this year.