Nio said on Dec. 25 that it expects a continued slowdown in Chinese electric vehicle sales during the first half of 2023 as demand weakens after Beijing’s phasing out of EV purchase incentives and amid a post-pandemic downturn.
Why it matters: Nio is the latest automaker to share a grim view of the world’s biggest EV market, which has seen exponential growth in the past two years despite Covid-19 headwinds, rising battery prices, and chip shortages.
- Nio chief executive William Li said at a press event that EV makers could face intense pressure in the coming months and not manage to recover sales until at least next May.
- China’s phase-out of EV purchase subsidies has driven many consumers to place their orders before the end of the year, while it will take time for the supply chain to get back up to speed after the pandemic, Li said.
Details: Li added Nio could face near-term pressure on sales, but that there is certainty about the long-term sales potential for the company’s new car models as it will enter a production ramp-up phase in the first half of 2023.
- New energy vehicles have taken a 30% share of new car sales in China, several years earlier than many expected, Li said. He also applauded rival BYD for selling as well as it has done.
- Despite sounding bearish in the short term, Li said that Nio is confident its sales could surpass those of traditional gas car makers like Lexus next year, though he cautioned that Nio will still be far away from giants like BMW, Mercedez, or Audi. Year-to-date sales of Lexus, Toyota’s luxury arm, fell 16.5% year-on-year to around 168,600 vehicles as of November, according to figures from the China Passenger Car Association.
- Nio also revealed two new models at the event. In May, the EV maker will start delivering its new electric crossover coupe, the EC7, with a starting price of RMB 488,000 ($69,978). Delivery of its all-new ES8 sports utility vehicles, priced from RMB 528,000, will begin in June.
- Meanwhile, the company introduced its third-generation battery swap station, capable of carrying 21 battery packs and providing up to 408 battery swaps per day, which is about a 30% increase from previous levels.
- Mass deployment is scheduled for March, a move president Qin Lihong described as aiming to meet peak demand from a growing number of Nio owners in the next stage of the company’s development.
Context: Nio reported deliveries of 106,671 vehicles, with four SUVs and two sedans on sale from January to November, up 31.8% from a year ago but falling short of its annual target of 150,000 vehicles. It plans to further expand its product family by launching three new models next year.
- The Chinese EV maker was forced to idle production for a few days at its facility in the eastern city of Hefei in April, due to a three-month lockdown to curb Covid cases in Shanghai.