NIO's sales staff said they have never seen such big discounts, but there are not many cars like this available.
(Image credit: CnEVPost)
NIO (NYSE: NIO) is offering discounts of up to 100,000 yuan ($14,900) on some models to boost sales, a local media report said.
NIO has begun reducing the prices of the 2022 ES6 and ES8, with some discounts on the newer ES7, Jiemian reported today.
NIO management informed sales about the plan at a meeting on the morning of February 1 and began implementing it, the report said, citing two salespeople.
However, the company did not publish this information on the NIO website, the NIO App or other official channels, according to the report.
NIO salespeople said they have never seen such large discounts, which are unprecedented, the report said.
Consumers who purchase the 2022 ES6 and ES8 will still be eligible for the same subsidies offered by NIO as the already expired state subsidies, and the three-year loan is free of interest and fees.
NIO also gives consumers an exclusive subsidy of RMB 15,000 if they trade in their old cars, according to the report.
NIO salespeople said they can treat existing cars in stock as show cars in the sales system, thus allowing consumers who buy the ES6 to receive an additional RMB 18,000 discount, and the 2022 ES8 discount is RMB 24,000, the report said.
For vehicles with an inventory cycle of 120 days or more, the maximum cash discount can reach RMB 40,000.
NIO is also giving consumers who purchase the 2022 ES6 and ES8 a free NIO Pilot package worth RMB 39,000.
NIO also offers an additional RMB 9,600 discount on the optional NOMI and 6,500 RMB enhanced display package, worth RMB 4,900.
For vehicles with an inventory cycle of more than three months, NIO is giving owners a service package worth more than RMB 10,000 that includes commercial insurance, the report said.
Under the promotional program, the price of the 2022 NIO ES6 and ES8 has been reduced by up to more than RMB 100,000, the report noted.
The program is available both to consumers who purchase vehicles that include batteries and to those who purchase vehicles under BaaS (battery as a service), the report said.
NIO is also offering discounts of RMB 3,000-5,000 for consumers who pay a one-time cash payment, including for the ES7.
One of the salespeople offered a purchase option that showed that for the 2022 ES6 Performance Edition with the 100-kWh battery pack, it would cost RMB 432,900 after adding some options, but could be purchased at a discounted price of RMB 313,700.
However, he stressed that there are not many such cars available.
Another NIO salesperson said that after the program was implemented yesterday, many cars in stock are not available today.
Notably, the 2022 NIO ES6 and ES8 are older models of NIO, and the company is switching these NT 1.0 platform-based models to the NT 2.0 platform.
NIO launched two new models -- the EC7 coupe SUV and the all-new ES8 -- at NIO Day 2022 on December 24, 2022, with deliveries set to begin in May and June 2023, respectively.
On January 11, the Chinese Ministry of Industry and Information Technology announced the latest batch of models that will be allowed to be sold in China, and the new NIO ES6 was included.
The model's LiDAR and camera settings are consistent with the other current NIO models based on the NT 2.0 platform -- ES7, ET7, ET5, EC7, and the new ES8, the filing information shows.
For NIO, the new ES6 is something to look forward to, as it is NIO's cheapest SUV and has contributed the most sales to the company in a long time.
From January to August 2022, the ES6 delivered 32,877 units, contributing 46 percent of NIO's total deliveries of 71,556 units in that period, figures monitored by CnEVPost from the company as well as from the China Passenger Car Association (CPCA) show.
NIO's reported move comes at a time when China's new energy vehicle (NEV) industry is facing increased pressure, with state subsidies withdrawing and economic growth slowing affecting people's purchasing power.
The company released figures yesterday showing it delivered 8,506 vehicles in January, down 46.22 percent from 15,815 in December and down 11.87 percent from 9,652 in the same month last year.
NIO did not provide any explanation for the drop in deliveries.
The company's local peer XPeng (NYSE: XPEV) said yesterday that its drop in deliveries reflected a seasonal slowdown during the Chinese New Year holiday that began in mid-January. January 21 to January 27 was the just-passed Chinese New Year holiday.
The seasonality of the holiday was the most obvious one to affect car companies' January deliveries, but the industry is also starting to worry about growth after the withdrawal of state subsidies.
China's NEV sales growth has reached a bottleneck and will be a serious issue after some policies are withdrawn, Cui Dongshu, secretary-general of the CPCA, said in a January 18 article.
NEV models have previously increased prices too much, but fewer orders, combined with price cuts by leading car companies, including Tesla, have led to a wait-and-see mood among consumers, Cui said.
Tesla sharply cut the prices of its entire Model 3 and Model Y lineup in China on January 6, its second price cut in China in three months.
In a report yesterday, Reuters cited a memo saying Tesla plans to produce an average of nearly 20,000 cars a week at its Shanghai plant in February and March, as the price cut spurred demand.
NIO founder, chairman and CEO William Li has downplayed the impact of Tesla's price cuts on his company in the past, saying the two are targeting different groups and that NIO's average selling price is RMB 100,000 yuan higher.
But Li is concerned about pressure on demand for cars at a time of slowing economic growth in China.
In a media group interview after the NIO Day 2022 event on December 25, Li said the withdrawal of subsidies could lead to some consumers releasing their 2023 vehicle demand early, and that it will take time for the supply chain to recover from the Covid impact and for consumer confidence to return.
"I think (the NEV market) will be under more pressure in the first half of next year on both the supply and demand side, but definitely a little bit more pressure on demand," Li said at the time.
Li believed at the time that China's NEV market would face a period of pressure in the first half of the year, though if looking on the bright side, the market could gradually recover in the second quarter or in May.
NIO responded to the report, please check the link below.
NIO says incentives limited to few stock cars in response to reports of big discounts