The launch of the China-made Model Y at a competitive price has raised concerns about the future of Tesla's Chinese rival, with rumors that Nio's orders have been affected. The company is responding again.
Nio announced the launch of its used car business today. At the press conference, William Li, chairman, founder and CEO of Nio, said that Tesla Model Y has not had an impact on Nio and that there has been no major change in orders in the past two days.
On Tesla's continued price cuts, Li said it has to do with its pricing strategy. "There are car companies that price their cars according to cost, so the price will get lower and lower. But Nio has considered many factors for the future from the beginning, and we won't let the owners who buy Nio first lose out."
This is also the reason why Nio's gross margin loss is relatively high in the first two years, he said.
Nio President Qin Lihong also said that Nio's car will not be reduced in price, the product, process and service would have been at that level.
On January 1, China-made Model Y was launched, with starting prices of RMB 339,900 and RMB 369,900 for the long-range and high-performance versions, respectively, a significant price reduction of RMB 148,100 and RMB 165,100 compared to the previous imported version.
Rumors then surfaced that Tesla's direct competitor, Nio, suffered a massive order cancellation on the day the Model Y went on sale.
In response, Nio responded by saying, "The news that the official website system suffered a massive order cancellation is untrue, and we have already launched a complaint against the relevant platform."
This also reflects concerns about the impact of Tesla's price cut on China's new car makers, including Nio, although the impact has been generally downplayed from industry associations to analysts.
Cui Dongshu, secretary general of the China Passenger Car Association, argued in an article Saturday that the Model Y price cut will mainly impact the market share of traditional luxury cars, with limited impact on new car makers such as Nio.
Cui believes that after the price cut, the competition between Model Y and Audi Q5, Mercedes-Benz GLC and BMW X3 will be significantly reversed, and the price of Model Y has certain advantages and will gain more enthusiasm from luxury car consumers.
Especially while in mega cities, Model Y should have a better a performance due to the greater advantage in licensing policy, he said.
Cui believes that the impact of Tesla's price cut on new car makers, including Nio, is not particularly large, because Tesla's main competitors are still traditional luxury cars. The new car makers' products have distinctive own labels and more features compared to Tesla.
Analysts such as Song Shao Ling of CITIC Securities said in a report on Sunday that the market is concerned that Tesla's models keep dropping in price, which will put a squeeze on other brands, but they see it as more of a boost to the new energy vehicle industry.
The team said China's electric vehicle penetration rate is less than 6 percent, and the industry is in a high growth phase with huge market space.
Tesla's declining prices, which drive the popularity of electric smart cars and promote consumer acceptance of electric vehicles, can accelerate industry change, these analysts said.
In addition, Tesla is leading the industry in electrification and smart features, helping to drive China's electrification and smart supply chain to become more mature, the team said, adding that other car companies will also benefit, making it easier to build "good products" at a "good price".
