China’s NIO Cuts Prices, Revises Services to Boost Sales
Shanghai-based electric vehicle maker, NIO, is shifting gears in its marketing strategy with significant price reductions and significant changes to its service offerings, in a strategic move to bolster sales.
From June 12, the starting prices for all new NIO models will see a reduction of RMB 30,000 yuan ($4,200). However, the previously free battery swap service will no longer come as a standard offering and will instead be a paid option, as announced by the company today, reports CnEVPost.
The company aims to attract more customers by introducing a comprehensive new package for those placing a deposit for a new NIO model from today onwards. The package includes a 6-year or 150,000 km warranty for the first owner, a 10-year unlimited mileage warranty for the motor, electric control and electric drive systems, as well as 6 years of free internet connectivity and 8GB of monthly internet traffic. Additionally, customers will receive free lifetime roadside assistance.
Buyers depositing for the new ES6 and the new ES8 before July 31 will still receive a free home charging pile. However, the free battery swap service will be replaced with a flexible charging and battery swap service package available for purchase.
Customers securing a new NIO vehicle between June 12 and July 31 can opt for an upgraded service package for RMB 30,000. This upgraded package provides perks such as a free lifetime battery swap service 4 times a month, a 10-year unlimited mileage warranty on the vehicle, free lifetime car internet connectivity with 8GB of traffic per month, and lifetime free roadside assistance.
In a special offer, those depositing for the new ES6 and ES8 on or before July 31, and also opting for the service package, can choose to forgo the free home charging pile and upgrade their free battery swap services to six per month.
For customers who have ordered but not yet taken delivery of their vehicles, NIO will include the upgrade package at the same purchase price. However, customers can contact NIO to cancel the upgrade package before delivery and get a price reduction of RMB 30,000.
Existing NIO owners, who have taken delivery of their vehicles, will continue to enjoy their current benefits. If these customers purchase another NIO vehicle, they can choose to transfer the benefits from the original vehicle to the new one, potentially earning significant discounts if they relinquish their original free battery swap service.
NIO said on Friday it anticipates customer deliveries to reach between 23,000 to 25,000 vehicles for the second quarter. Considering its past performance with 6,658 vehicles delivered in April and another 6,155 in May, the company is on track to sell between 10,187 to 12,187 cars in June. These projections suggest a significant monthly surge in sales for June, with an increase ranging from 66% to 98% over May’s figures.
NIO reported a net loss of 4.74 billion yuan (US$665 million) for the quarter ending March 31, an improvement of 18.1% compared to the 5.79 billion yuan loss experienced in the previous quarter. Deliveries to mainland customers saw a drop of 22.5% from the fourth quarter of 2022, with the company managing to deliver only 31,041 vehicles in the given period. Furthermore, NIO’s revenue for the first quarter fell short of expectations, recording a 33.5% drop from the previous quarter to 10.7 billion yuan. This was lower than the median forecast of 12.3 billion yuan as per a Bloomberg analysts’ survey.
As of today, NIO operates 1,484 battery swap stations across China, having provided over 22.9 million free battery swap services. The company also boasts of 15,881 completed charging piles in the country.
Later this week, NIO will launch the ET5 Touring globally.