China’s electric vehicle price wars have been recharged. Tesla’s decision to increase sales and regain market share in China by slashing prices in late 2022 led competitors such as BYD to follow suit. Nio remained above the fray. Now it has instigated a fresh fight.
Chief executive William Li once said the company would not follow Tesla’s lead. A 23 per cent quarter-on-quarter drop in sales in the first three months of the year and a gloomy outlook for the second quarter appear to have changed his mind.
Nio’s move to cut prices by Rmb30,000 ($4,200) means buyers save about a tenth on the cheapest models. New buyers will no longer receive free battery swaps either. Research and development projects will be shelved as the lossmaking company attempts to lower costs.