With China announcing its intention to slash electric vehicle subsidies further in 2021, Nio Nio Inc – ADR NIO is fielding an offer to customers to circumvent the negative impact of the subsidy reduction, CNTech Post reported Thursday.
What Happened: New energy vehicle subsidies will be cut by 20% in 2021 on a year-over-year basis, according to a release from the Chinese Ministry of Finance.
The reduction is a more modest 10% for EVs used for public transportation and utility.
With the reduction, the subsidies for Nio's newest EC6 model with a 100 kilowatt-hour battery pack would fall from 22,500 yuan ($3,441) in 2020 to 18,000 yuan ($2,753) in 2021.
Related Link: Nio Day Set For Jan. 9: What You Need To Know
Nio's Deal For Customers: Nio announced that if customers pay a deposit on or before Jan. 10, they can purchase the company's EVs at the same price as in 2020.
The difference between the price with the reduced subsidy and the applicable price in 2020 will be borne by Nio, the report said.
Benzinga's Take: The announcement from Nio could be a strategic decision to push sales, especially as competition intensifies in the domestic market.
It remains to be seen if the action produces a pull-forward effect that could impact sales in the subsequent months.
Related Link: BofA's Takeaways On Nio's 2021 Plans
Photo courtesy of Nio.
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