NIO has no intention of engaging in a price war, despite recent price cuts by many internal combustion engine (ICE) automakers. Pu Yang, NIO's assistant vice president of sales operations, stated that NIO would not lower its prices, and that the current price cuts were due to cyclical fluctuations in the transition from ICE vehicles to smart EVs.
He believes that price wars cannot cross the cyclical fluctuations brought about by technological revolution, and companies must adhere to their brand values. Instead, NIO will focus on continuously investing in infrastructure, keeping prices and configurations stable, and full-stack in-house research and development to enhance user experience.
As more companies enter into a price war, it leads to a wait-and-see sentiment among consumers to avoid post-purchase price cuts. However, NIO's counterpart, Li Auto, has introduced a consumer price-protection benefit, which will refund the difference if the price drops within 90 days of purchase.
Pu has seen Li Auto's move and states that NIO had considered issuing a similar policy but decided against it. NIO believes that the plunge in ICE vehicle prices in China will be a landmark event and potentially a watershed moment for the auto industry as a whole.
Pu believes that the new energy vehicle market will develop, and the price cuts will disappear soon. He is optimistic about the whole-year performance of the passenger car market in China and believes that sales will increase compared to last year. NIO has seen an increase in visitors to its stores and test drives and is confident about growth given the upcoming Shanghai auto show.
NIO's brand strategy does not involve introducing single-motor models or models without LiDARs to make their prices lower. Instead, NIO's strategy focuses on providing users with a highly configurable, high-quality-of-service experience. The company believes that improving service quality is an effective means of dealing with competition, including adding 1,000 new battery swap stations to make its users' experience more comfortable.