Source: Cailian Press Author: Xu Hao.

Following BBA's withdrawal from the "price war", Nio Inc. will also soon adjust its discount levels.

"Now the ET5T immediately offers a discount of 34,000 yuan from the current car, and orders after July 21st offer a discount of 31,000 yuan, a decrease of 3,000 yuan; the ES6 immediate discount is 38,000 yuan, orders after July 21st offer a discount of 33,000 yuan, a decrease of 5,000 yuan." Some salespeople said, "Beijing Jing brand purchases 10,000 yuan cash and configuration discounts may also be lowered this quarter. High-quality and affordable current autos are being digested quickly, and policies will gradually decrease."

"Now ET5T directly discounts 34,000 yuan in stock, and orders after (July) 21st have a discount of 31,000 yuan, reducing by 3,000 yuan; ES6 directly discounts 38,000 yuan in stock, and orders after (July) 21st have a discount of 33,000 yuan, reducing by 5,000 yuan." Sales representatives said, "Beijing Jing brand car purchases may also decline by 10,000 yuan in cash and configuration discounts this quarter. High-quality priced inventory is being digested quickly, and policies will gradually decrease."

Nio Inc. has not made an official response regarding a discount adjustment for the terminal market.

As a member of the first camp of traditional luxury brands, BMW has recently stated that it will take the lead in exiting the "price war". BMW China said that in the second half of the year, BMW will focus on business quality in the Chinese market and support dealers to steadily consolidate their position. Subsequently, it was reported from the terminal that Mercedes-Benz and Audi have also successively given dealers a more relaxed environment through their sales strategies of “reducing the quantity and stabilizing the price.”

"If we continue to participate in the 'price war' regardless of the cost, the dealership cannot afford it, and the official subsidy is also difficult to maintain," said a Mercedes-Benz dealer. For Nio autos, which adopts a direct sales model, sales growth has been achieved by increasing the intensity of discounts, but performance has also been under pressure.

According to the financial report, Nio autos' vehicle revenue in the first quarter was 8.4 billion yuan, a decrease of 45.5% compared to the fourth quarter of 2023, with a delivery volume of 30,053 vehicles. This means that its single-vehicle revenue has dropped to 0.279 million yuan. From the official guide price point of view, Nio is currently selling 8 models, and only two of them have a guide price lower than 0.3 million yuan.

In terms of gross margin performance, Nio's vehicle gross margin in the first quarter was 9.2%, and the comprehensive gross margin was 4.9%, both of which decreased from the previous quarter. Nio explained that the main reason was that discount increases during product switching led to a decline in the average selling price, and adjustments to product portfolios offset some decreases in unit material costs. At the same time, Nio autos' net loss in the first quarter is still 5.185 billion yuan.

At the Q1 financial report conference call, Nio Chairman Li Bin had expressed his attitude towards stopping the "price war". Starting from June, Nio will focus on adjusting its product structure, increasing the proportion of first-line high gross margin products launched, and narrowing short-term promotional policies. "Overall, optimizing gross margin is an important task for us in the next stage, while ensuring a steady increase in sales." Li Bin expects that the company's overall vehicle gross margin will return to double digits in the second quarter of this year and will continue to improve in the third and fourth quarters.

Editor/Lambor