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Nio announced on Monday to cut starting price by RMB30,000 for all of its new models. Following the adjustment, the flagship ET5 sedan starts at less than RMB300,000, the electric SUV ES8 updated in December is sold at less than RMB500,000, and the new ES6, a smart electric all-round SUV launched in May, costs RMB338,000.

In the meantime, Nio said it didn’t offer free battery swapping services for buyers who ordered new cars and placed deposits from Monday on, and such free services was changed to a paid option for new clients. The updated benefits for new buyers include a six-year or 150,000-kilometer warranty for the whole vehicle, ten-year unlimited mileage warranty on the electric control, electric drive and motor, six years of free internet connectivity, eight GB of monthly internet coverage, free lifetime roadside assistance. The automaker said it would roll out flexible package for future charging.

The price cuts came days after Nio released its financial results. Its revenue in the quarter ended March 31 rose7.7% year-over-year (YoY) to RMB10.676 billion (US$1.55 billion), missing the analysts’ estimates of RMB12.275 billion. The sales dropped 33.5% from previous quarter. It expected revenue of the current quarter to between RMB8.742 billion and RMB9.37 billion, representing a YoY decline range of 9.0% to 15.1%.

Nio will definite achieve the break-even later its previous forecast, CEO William Li, or Li Bin, confirmed at an earnings call on Friday. However, the executive showed optimism on the sales in the next months. He said his company has confidence to meet the monthly sales target of more than 20,000 units in the second half of this year, adding the new ES6 received a warmly welcome and its conversation rate following the trial driving set a new high.

There are too many aspects to consider but it’s the right time to unveil the price reduction, Li responded Monday’s price move on Monday. He revealed Nio has discussed the price adjustment internally for a long time, and listened to some car owners’ suggestions, though the company could not satisfy everyone. The price cuts may be Li’s killer to achieve his monthly sales goal, the state-owned national newspaper the Securities Times commented.

Prior to Nio’s massive cuts, a number of Chinese automakers have engaged in a price war ignited by Tesla earlier this year. The U.S. electric vehicle giant reduced price by up to 13% in China on January 6. The starting price of Model Y and Model 3 sold in China accordingly were down to new low. Later that month, Seres Group announced to trim prices by RMB 30,000 for two SUV EV models co-developed with Huawei. Xpeng announced to offer a new round of price cuts between RMB20,000to RMB36,000 for three EV models.

In the beginning of February, Nio was reported to offer massive price cuts up to RMB100,000 for versions of ES6 and ES8 updated in 2022. Nio is near to update its 2022 versions of ES6, ES8 and EC6, and buyers of these models in stock and on display at the exhibition, though a small number, can enjoy special promotions for vehicles at the auto show under the company’s policy, an official at the EV manufacturer later clarified.

Nio will not follow suit with downgrading or offering less benefits for buyers of various versions of ET5, the mid-size smart electric sedan, and we believe that the current wave of price cuts that comes fiercely will recede quickly, Pu Yang, the assistant vice president of sales and operations at Nio, commented on the major price reductions by BMW, Mercedes-Benz, Audi and other auto brands for of their flagship models in an interview in March.

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