As of June 12th, Nio has lowered prices of all its models by $4,200 which translates to a discount of 6% to 9% and it applies even on the revamped ES6 and ES8 sports utility EVs. The price war has intensified and demand has weakened, resulting in a drop in Nio’s April and May sales. During the first five months of the year, Nio delivered 43,854 pure EVs that are priced above 300,000 yuan, while Tesla’s China sales were five times greatest. Even its Chinese rival BYD Company Limited (OTC:BYDDY) sold 923,343 EVs and plug-ins over the period, and they were both priced for less than 300,000 yuan. The latest monthly figures are even more concerning as Nio’s deliveries fell from the first quarter average of more than 10,000 vehicles a month to 6,155 vehicles in May. In the previous, fourth, quarter, Nio’s delivery averaged to 13,500 vehicles. 

Also as of Monday, Nio is no longer providing free battery swapping services to new buyers it used to offer about four times each month. Tesla dropped this service due to issues and difficulty in scaling it for a wider use. What a difference to back in April, when Nio CEO William Li showed determination not to enter the price war that got started by Tesla and to back in February, when Nio announced its plans of expanding the battery swapping network by building 1,000 swapping stations this year and bring the total to 2,300 sites.

The battery swap concept drained Nio’s financials as net loss deepened from 1.8 billion yuan that Nio lost during the same period last year to 4.7 billion yuan it lost in the first quarter. On Friday, Nio showed that as of March, it had cash and cash equivalents dropped from the end of 2021 and 2022 to 14.76 billion yuan ($2.07 billion) but management assured it has enough on its hands. During the first quarter, gross margin fell sharply  from last year’s comparable quarter (14.6%) and even from the previous, fourth, quarter (3.9%) to only 1.5%.

After its shares slumped almost 20% year to date, the news of Nio following Tesla and its footsteps brought a rise of 5%. Delays in business expansion plans and research is never good news but controlling costs is what must be done in challenging times with some analysts such as China Merchants Bank finding Nio’s move to be done too late, with the automaker now having to defend its brand positioning while Tesla goes on to challenge the charging industry standard as Ford Motor (NYSE:F) and General Motors (NYSE:GM) entered its supercharging network. If even General Motors realized it is better off with Tesla, with CEO Mary Barra saying that the deal will save the legacy automaker up to $400 million investment, following Tesla’s lead seems to be the best way forward. General Motors quickly joined Ford in embracing Tesla’s fast charging network. But Nio lost quite a bit while resisting to follow Tesla’s footsteps, while General Motors and Ford both pulled a win-win. With the most recent discounting move, Nio can only hope that it’s not too late for a win.