Nio Inc NIO CEO William Li has said that the Chinese EV maker will not take part in pricing wars while adding that Elon Musk‘s Tesla Inc TSLA cannot decide EV prices in China.
What Happened: Li, at a recent industry conference, said Nio will not be a part of EV price wars as its gross margins are too low, reported Electrek. Blind price cutting will create ruthless competition in the country, he added, while speaking at an industry conference.
Tesla’s Model 3 and Y are relatively less complex in functions and configurations as compared to Chinese rivals such as BYD, Li said, as reported by Electrek.
“Tesla can fix vehicle prices in the U.S. with a market share of over 60%, but not in China, where it holds only about 7%,” he added.
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For the full year of 2022, Nio reported a gross margin of 10.4% as compared to the 18.9% recorded for the year before. The company’s loss from operations increased 247.9% year-on-year to RMB15,640.7 million in 2022, despite increasing vehicle sales.
Tesla rapidly cut prices on its vehicles in the U.S., China and several other markets at the onset of this year, sending rival EV makers into a price war to compete. Tesla’s demand got a boost and the EV giant reported a 36.39% increase in vehicle deliveries in the first quarter.
Price Action: Nio stock fell 0.4% in extended trading after closing down 6.9% at $9.79, according to Benzinga Pro data.
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