SHANGHAI — Chinese EV maker and Tesla rival NIO said it would cut prices on all its new models starting Monday. The announcement comes days after the company reported quarterly results below estimates.
NIO is only produced in China where it’s sold including the European market. It is not sold in the U.S.
Outside of China, the Chinese automakers sell their cars in Germany, Sweden, Denmark, and the Netherlands.
It will sell their cars in Norway as the country will be the first to ban the sale of fossil fuel cars in 2025.
The starting price of 6 new models will be reduced by 30,000 yuan or $4,200, the company said in a statement. The vehicles include ET5, ES6, ET7, ES7, EC7 and ES8.
Further, the company will no longer provide a free battery exchange service for new users instead users can exchange batteries for a single payment.
On Friday, NIO reported first-quarter FY23 sales growth of 7.7% year-on-year to $1.56 billion, missing the consensus of $1.63 billion. Vehicle sales declined, and vehicle margin contracted 1,300 basis points to 5.1%. Net loss for the quarter expanded to 4.7 billion yuan as compared to 1.8 billion yuan in the previous corresponding period
For the next quarter, NIO sees deliveries of 23,000 to 25,000, down by 8.2% – 0.2% year-over-year, and revenue of $1.27 billion to $1.36 billion, down by 15.1% to 9.0%.
“That said, we expect NIO’s implied upside to be capped by intensified competition and limited market share improvement in 2023F,” said Nomura analysts in a written statement.
In April, CEO William Li had said that the company wouldn’t join the price war triggered by EV giant Tesla as its gross margins are too low.
“Tesla can fix vehicle prices in the U.S. with a market share of over 60%, but not in China, where it holds only about 7%,” he said.
Tesla slashed its prices in the U.S. that resulted in the increase in sales as the Model 3 and the Model Y are the cashcow for the company.
In January, NIO set a record of over 62,000 battery swaps for their cars in a single day.
Produced in association with Benzinga
Edited by Daisy Atino and Alberto Arellano