The president of Nio believes that premium EV brands should avoid using discounts to boost sales volume.
According to Qin Lihong, the faster pace of electrification on mainland roads this year bodes well for premium EV producers.
According to a senior Nio executive, China’s competitive premium electric vehicle market will not necessarily result in an all-out price war as battery-powered counterparts replace more gasoline cars.
Price cuts are not essential
The president of the Shanghai-based carmaker, Qin Lihong, told the media on Monday that it was not beneficial for premium EV brands to give massive discounts to boost sales, an indirect reference to the latest significant price cuts by US EV maker Tesla.
Price reductions will spread in the EV industry, but not all players will follow suit,
For a premium brand, offering discounts to chase a rise in sales volume is not an ideal solution
Qin Lihong, Nio’s President stated on price cuts
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Premium EVs in China were affected by Tesla price cuts
Qin believes the increasing electrification rate on mainland roads will benefit premium EV producers this year, despite increased competition.
China’s premium EV manufacturers report a steep drop in sales following Tesla’s discounts.
Overall, 2023 will be a stern test for EV makers, but we believe growth opportunities remain huge as the EV adoption rate continues to rise
Qin Lihon, Nio’s President stated on price cuts
In 2022, approximately one in every four new cars sold on the mainland, or 6.5 million units, would be powered by batteries, representing a 96% increase yearly.
According to the China Passenger Car Association, EV sales growth will slow to 26% in 2023.
Nio, Li Auto, and XPeng to collaborate
Nio and Beijing-based Li Auto, and Guangzhou-based Xpeng are regarded as China’s best response to Tesla.
The trio builds intelligent electric vehicles with autonomous driving technology, sophisticated in-car sound systems, and high-performance batteries.
Dwindling demand for expensive EVs since late 2022, combined with consumer job uncertainty and wage cuts, prompted Tesla to slash prices of its Shanghai-made Model 3 and Model Y vehicles two times in three months in China.
Tesla’s Gigafactory in Shanghai has reduced prices twice since late October, bringing Model 3 and Model Y prices to their lowest levels since the factory’s first vehicle rolled off the line in December 2019.
Tesla granted discounts of up to 9.4 percent on the Model 3 and Model Y vehicles on October 24 before slashing prices by up to 13.5 percent on January 6.
