Nio says it will not join the “price war” and lower prices like Tesla

  • CEO William Lee told CNBC in an interview that Chinese electric car company Nio will keep its prices high rather than lower them.
  • Elon Musk’s car company has lowered prices this year in the US and China.

New energy electric cars are seen at the Nio store in Shanghai, China, March 19, 2023.

Publishing in the future | Publishing in the future | Getty Images

SHANGHAI — Chinese electric car maker Nio will keep its prices high rather than lower them, CEO William Lee told CNBC in an interview.

“As for us, we will definitely not join the price war,” Li said, claiming that Nio’s products and services are worth the price. This is according to CNBC’s translation of his notes in Mandarin.

Tesla, Elon Musk’s car company, has cut prices this year in the US and China. Nio also sells cars in the premium segment of the market, but its SUVs and sedans can be much more expensive than Tesla’s models.

Lee said his company would focus on improving customer services — such as adding battery exchange and charging stations. The swap technology claims to change batteries in minutes so drivers don’t have to wait for a charge.

There are many new products coming to the market, which of course means fierce competition for us. But for users, they have a more plentiful selection.

William Lee

CEO, Neo

Nio announced last week that starting June 1, people who’ve made deposits for just some of its car models will get to use the company’s battery replacement service for free four times a month. That’s down from as many as six free swaps in the previous month.

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The company also said last week that it would start charging drivers 380 yuan ($56) per month to use the assisted driving system, called Navigate on Pilot (NOP) plus. The program is free to test.

Offering technology to assist drivers with parking, lane-changing on highways and other tasks has increasingly become a selling point for electric vehicle companies in China.

This assistive driving technology may currently only rank ninth or tenth among users’ needs, according to Li, who is also the founder and chairman of Nio. He said that people’s assessment of the technology will change once they experience it, and that he expects assisted driving to become a standard feature in the vehicle.

Nio’s car sales grew 37% last year to 45.51 billion yuan ($6.61 billion), with the overall company still operating at a loss.

Its revenue comes mainly from China, where government policies have helped accelerate the growth of electric vehicle sales. New energy vehicles — which include hybrids and pure electric vehicles — saw passenger car sales penetration reach 34% in March, according to the China Passenger Car Association.

He told me that this is faster than Niu expected.

“There are many new products being introduced to the market, which of course means fierce competition for us,” he said. “But for users, they have a much more abundant selection.”

BYD is still by far the dominant market player in China. It sold 264,647 battery-only passenger cars in the first three months of the year, up more than 80% from last year. Hybrid passenger car sales doubled year-over-year, to 283,270 in the first quarter.

Tesla delivered more than 422,000 vehicles worldwide in the first quarter, up 36% from last year. The company did not release figures for China, which typically accounts for more than 20% of Tesla’s revenue.

In the past two years, Nio has started delivering to European countries such as Norway and Germany. Tensions between China and the United States escalated, while relations between Europe and Beijing were not smooth either.

Li said that sustainable global development requires good products for users all over the world, which cannot be done by relying on one country.

Read more about electric cars from the CNBC Pro

“Despite the great challenges we face geopolitically, we still want to stick to serving our customers, taking care of the pace of investment and managing operational risks well,” he said.

When asked about the US market, Lee said the company is going ahead with its plans. “But we know that the challenges will certainly be greater and greater,” he said, without elaborating.

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