Premium EV maker Nio reported disappointing third-quarter results as intense price competition in 中国‘s electric vehicle market continues to squeeze margins and impact sales targets, reports 彭博社.

Revenue Growth Overshadowed by Losses

The Chinese automaker posted revenue of 18.7 billion yuan ($2.6 billion) in Q3 2023 after delivering 61,855 vehicles, falling short of analyst expectations. The company reported a wider-than-anticipated adjusted net loss of 4.4 billion yuan, highlighting the challenging market conditions.

Price War Takes its Toll

Initially resistant to market pressures, Nio eventually joined the pricing battle initiated by 特斯拉, slashing vehicle prices by up to 30,000 yuan last year. This strategic move came as Chinese manufacturers faced mounting pressure to offer discounts and incentives to protect market share in an increasingly competitive landscape.

Production Challenges and Future Outlook

The company’s new mass-market Onvo brand, launched in September, has experienced slower-than-expected production ramp-up. Despite these challenges, Nio aims to deliver between 72,000 and 75,000 vehicles in Q4, though this target falls below analyst forecasts. Revenue is projected to reach 20.4 billion yuan.

Pure Electric Strategy in a Shifting Market

Nio remains one of the few Chinese EV makers committed solely to battery electric vehicles, potentially missing out on the growing hybrid market. Competitors like Xpeng, Zeekr, and Avatr Technology are developing extended-range EVs with small internal combustion engines for battery recharging.

European Expansion Amid Tariff Challenges

在欧洲, Nio has had to increase prices due to new tariffs on Chinese EV makers but maintains its commitment to investing in the region, demonstrating its determination to establish a global presence despite regulatory headwinds.

EVXL’s Take

The intensifying price war in China’s EV market reflects a maturing industry where competition is becoming fiercer and profit margins tighter. As discussed in our recent Tesla analysis, this trend could reshape the global EV landscape, particularly as Chinese manufacturers like 尼奥 expand internationally despite regulatory challenges.

What are your thoughts on Nio’s strategy to maintain its pure EV focus while competitors diversify into hybrids? Share your perspective in the comments below.