Chinese EV maker Nio expects record second-quarter sales, launches lower-cost brands as it vies with Tesla, BYD in cutthroat market

Chinese electric car maker Nio said it expects deliveries to hit record figures for the April to June quarter after introducing buyer incentives, amidst a bruising price war in the country.

The Shanghai-based firm said in its earnings report that second-quarter deliveries could reach 54,000 to 56,000 units, up 79.7 to 86.3 percent from the previous quarter, which at the high end would surpass its record 55,432 deliveries in the third quarter of 2023.

The firm posted a net loss of 5.18 billion yuan ($715.6m, £560m) in the first quarter, worse than analysts had expected as revenue plunged 42.1 percent from the previous quarter to 9.9bn yuan.

Deliveries for the first quarter of 30,053 vehicles were down 40 percent quarter-on-quarter as competitors introduced steep price cuts.

Battery-swap incentives

Nio introduced incentives in the second quarter including 12 months of rent-free use of its battery-swap programme, which allows users to access automated service points where a spent unit is removed from the bottom of the vehicle and replaced with a fully charged one.

As a result the company, which has dual listings in Hong Kong and New York, said it saw record-high deliveries in May.

BYD, the country’s biggest EV maker and second-biggest globally after Tesla, launched the latest round of price competition with steep cuts in February.

Prices of 50 models across various brands have dropped by an average of 10 percent since then, according to a Goldman Sachs study last month.

Like other EV makers, Nio is introducing additional brands at lower prices to drive increased sales, in May launching its mid-range Onvo brand and planning an even more affordable brand called Firefly in the first half of next year.

Onvo brand

The first Onvo vehicle, the L60 sport-utility vehicle, is priced starting at 219,000 yuan, 12 percent lower than the Chinese pricing of Tesla’s Shanghai-made Model Y and offering the same 555km range as Tesla’s vehicle.

“With Onvo joining our brand line-up, we are poised to expand into the broader mainstream mass market and embark on the next stage of high-quality growth,” said Nio co-founder and chief executive William Li in a statement.

The new brand, which is to be sold through a separate network of new outlets from Nio cars, will become profitable when it surpasses 20,000 monthly units, Li said in May.

Deliveries in mainland China are expected in September.