Nio dropped the price tag of its every model by 30,000 yuan (4,200 USD) in China, including the recently launched ES6 NT2. Previously, Nio’s CEO William Li underlined that it won’t join the price war that started at the beginning of 2023. As we can see now, the price adjustment looks like the only option for Nio to boost sales. Let’s get to know this situation better.
Why has Nio cut prices?
*Google translated
As it goes from the Nio’s official Weibo (Chinese social media) account, the price adjustment was caused by “the increasingly perfect charging and [battery] swapping network and the continuous construction of the service system”. Nio mentioned that these factors enabled them to provide its clients with “a more flexible and considerate service experience”. In simple words, it meant the price reduction. But is ‘prosperity’ of the BaaS service and charging stations infrastructure the real reason for this? Let’s try to find out together.
At first, let’s get to the Nio sales data. According to their official social media account, Nio sold 6,155 units in May 2023, down 7.5% from April. Moreover, they are down 12.4% in comparison with May 2023. This sales number comprised 2,396 crossovers and 3,759 sedans. Moreover, according to Deutsche Bank’s Edison Yu, Nio’ earnings are weaker than expected. In fact, the total revenue of this company in Q1 2023 reached 10,676.5 million yuan (1,554.6 million USD). It is a slight increase (+7.7%) from Q1 2022 and a notable decrease (-33.5%) from Q4 2022. So, it seems that Nio’s earnings aren’t that bad, but we can see that something isn’t going as planned on their side.
Moreover, according to Nio CEO William Li, their team discussed the price reduction internally for a long time. And even today, when the prices were cut, they have been arguing about it. So, let’s be honest, it doesn’t sound like a step caused by a “perfect charging and swapping network”. Instead, it looks like Nio wants to enhance its sales and boost earnings. On the other hand, they’ve not only lowered prices but also changed terms of the BaaS service in China.
Price reduction and service adjustments
As mentioned, Nio has dropped the price tag of its every model by 30,000 yuan (4,200 USD). In fact, it is the largest price reduction made by this luxury EV brand. It also comprises the recently launched ES6 NT2. Let’s detail the starting prices of Nio cars:
- Nio ET5 now costs 298,000 yuan (41,700 USD) with battery and 228,000 yuan (31,900 USD) with BaaS service;
- Nio ET7 is available for 428,000 yuan (59,890 USD) and 358,000 yuan (50,100 USD) with BaaS;
- Nio ES6 NT2 costs 338,000 yuan (47,300 USD) with battery and 268,000 yuan (37,500 USD) without battery (with BaaS service);
- Nio ES7’s starting price is 438,000 yuan (61,280 USD) and 368,000 yuan (51,500 USD) with BaaS;
- Nio ES8 NT2 costs 498,000 yuan (69,680 USD) and 428,000 (59,880 USD) yuan with BaaS;
- Nio EC7 is available for 458,000 yuan (64,080 USD) and 388,000 yuan (54,390 USD) without battery.
ES6 NT2 main competitors (according to Chinese consumer behavior research agency 车fans)
So, this price reduction is really influential. Currently, the Nio ET5 without battery costs 3,900 yuan (550 USD) less than the Tesla Model 3 with RWD. As for the Nio ES6 NT2, its price tag (with battery included) is 11,000 yuan (1,540 USD) lower than the Zeekr 001 ME, 21,800 yuan (3,050 USD) less than the entry-level Li Auto L7, and 68,300 yuan (9,560 USD) lower than the entry-level Mercedes-Benz GLC. We will remind you that these cars were previously mentioned as the main competitors of the ES6.
*Google translated
Speaking about the battery service adjustment, the previously available free battery swap service (for several times) is now a paid option. It means you will no longer enjoy some free monthly swaps in China when buying a vehicle with the battery. On the other hand, Nio vehicles’ buyers will get a 6-year or 150,000-km whole vehicle warranty, a 10-year unlimited three electric system warranty, 6 years of free in-car internet connection (8GB/month) and lifetime road assistance. As for the ES6 and ES8 buyers, they will also get a free home charging pile (in case they paid a deposit before July 31).
Editor’s comment
So, it seems that Nio is working hard on pushing its sales number that has been recently decreasing. It looks like social media users approved the price reduction, as there are lots of positive comments. Now, most of Nio cars are really engaging in terms of the price tag. So, we expect a huge sales jump in June’s data.
Source: Nio Weibo, Nio, Tipranks, William Li Weibo
Keyword: Nio joins the price war, lowering cost of every model by 4,200. ES6 NT2 included