Nio's William Li: Tesla's Price-Cutting Strategy May Not Work For Chinese Automaker


Tesla Inc's TSLA aggressive pricing strategy for its made-in-China Model Y vehicles may have led to abounding order flows for the electric vehicle maker, but its competitor Nio Inc – ADR NIO isn't necessarily following suit. 

What Happened: What works for Tesla may not be the right strategy for Nio, and every company has a different positioning and path, William Li, Nio's founder, chairman and CEO, reportedly said in an interview with a local media outlet, according to CN EV Post.

One car model cannot satisfy all users across the globe, and the key is whether a vehicle and the services offered are commensurate with the price, Li reportedly told.

Related Link: Nio's Li: New ET7 Takes Aim At BMW, Mercedes-Benz, Audi And Maybe Even Apple, But Not Tesla

Nio's innovative service offerings, such as lifetime battery exchange, free warranty and other benefits support the premium pricing of its cars, according to Li. The battery-as-a-service models, Li said, also makes its products affordable.

Although priced at a premium relative to German luxury models, Nio's cars are competitive in pricing, as they enjoy government new energy vehicle subsidies, the Nio CEO said.

Li also highlighted the fact that Nio's ES8 and ES6 were ranked first in the J.D. Power New Energy Vehicle Experience.

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Why It's Important: Tesla is up against a slew of homegrown rivals in the Chinese EV market. Analysts are of the view the Chinese EV market can support multiple players that can thrive on their competitive advantages.

After being on the brink of bankruptcy, Nio has rebounded nicely with a product- and service-based focus.

At the Nio Day event held earlier this month, the company launched its fourth vehicle model and its first-ever sedan, the ET7.

NIO Price Action: Nio shares were down 1.44% at $57.60 at last check Wednesday. 

Related Link: Nio Launches 'NIO Certified' Used Car Service in China Amid Competitive Pressure From Tesla

Photo courtesy of Nio.

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