Nio to release new policy on Jan 3 to guarantee its used cars' transaction prices

Chinese electric vehicle (EV) maker Nio (NYSE: NIO) will release a used car service policy on January 3, 2021, in order to guarantee owners a higher residual value when they sell their cars in the future, said Qin Lihong, co-founder and president of Nio.

Qin said on December 26 at the 2nd China Smart Car Brand Summit that "Nio will allocate funds to guarantee the value of its models in the used car market."

Prior to that, Nio had said that its used cars are expected to retain their value at a higher rate than the market price.

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Regarding specific information about the used car service policy, it was previously rumored that Nio would guarantee that its used cars would retain their value at a rate no lower than that of luxury gasoline cars in the same class. If this is not achieved, Nio may pay to make up the difference, but Nio has not officially admitted this.

In August this year, Nio launched the battery rental service BaaS, the core of which is a business model that can realize the separation of body and battery, battery rental, rechargeable, battery swap support, and upgradeable.

For those who choose BaaS, the purchase price of the car can be based on the original price minus the price of the battery, followed by a financial mortgage and monthly payment for the battery rental service.

This not only lowers the purchase threshold for consumers, but their batteries can also be upgraded. So far, about 35 percent of Nio's new car sales have chosen such a purchase method.

Qin said that the reason why Nio launched the used car service policy mainly depends on Nio to provide BaaS battery rental service to guarantee the value retention rate of vehicles.

In addition, based on the current vehicle intelligence and remote iteration of the continuous upgrade of technology, but also allows the vehicle to constantly keep up-to-date.

Based on BaaS, consumers can still opt for the battery rental service when purchasing a used Nio vehicle that does not include a battery. This eliminates consumer concerns about battery pack decay and protects the value of Nio used vehicles.