Published on July 6th, 2023 | by Sounder Rajen0
Chinese EV Brand Nio Forced To Cut Prices And Ends Free Battery Swapping
Nio has been forced to stop allowing free battery swapping as sales decline
As price wars intensify in China so many more Chinese electric vehicle (EV) manufacturers are forced to slash prices even more and start charging for services that would otherwise be free. One such example would be Nio, which recently had to end free battery swapping and slash prices as its sales decline.
Yes, Nio announced it will cut prices by 30,000 yuan (USD4,200) for all models including its revamped ES6 and ES8 SUVs from 12 June 2023, according to a company statement as the brand faces mounting pressure over earnings losses and lukewarm sales. This means discounts from 6 percent to 9 percent on Nio cars.
Moreover, the company will no longer provide free battery swapping services as more than 40 automakers 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.
Nio CEO William Li said on the company’s social media, “The adjustments had been discussed internally for quite a while and we took advice and suggestions from some users. It is the best timing to publish it … but we can’t make everyone happy.”
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 wide scale use.”
On top of that, Nio also said in February it would accelerate expansion of its battery 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 the end of the year. Nio’s investments in battery swapping stations, however, have been questioned by investors for dragging on its profitability.
What’s more, sales of Nio slid in April and May as the price war in China intensified and overall demand weakened. With its pure electric cars being priced above 300,000 yuan, Nio delivered 43,854 vehicles in the first five months.
In comparison, Tesla sales in China were more than five times Nio’s over the same period, while BYD sold 923,343 cars, thanks to its offerings of both pure electric and plug-in hybrids for less than 300,000 yuan and shares of Nio in Hong Kong rose nearly 5 percent on Monday. The shares have slumped nearly 20 percent so far this year.