China’s Nio cuts prices, ends free battery swapping as sales slide

SHANGHAI (Reuters) -Nio said on Monday it would lower prices for all models and end free battery swapping services to new buyers, as the Chinese electric vehicle maker faces mounting pressure in profitability amid lukewarm sales.

Nio (NYSE:) would cut prices by 30,000 yuan ($4,199) for all models including its revamped ES6 and ES8 sports utility vehicles from June 12, according to a company statement.

The company also would no longer provide free battery swapping services to buyers who place deposits on Monday and onwards, it added.

Nio has been offering the services for free for at least four times each month to existing owners. It is among only a handful of EV makers betting on battery swapping as a major power option for electric cars while rival Tesla (NASDAQ:) has dismissed battery swapping as “riddled with problems and not suitable for widescale use”.

Nio said in February it would accelerate the expansion with a plan to build 1,000 battery swapping stations in China this year to bring the total number of such facilities to 2,300 by year-end.

However, the loss-making company’s investments in battery swapping stations have been questioned by investors for dragging on its profitability. Its net loss reached 4.7 billion yuan in the first quarter, compared to 1.8 billion yuan in the same period a year ago.

Sales of Nio also slid in April and May as a price war in China intensified while overall demand weakened.

($1 = 7.1388 renminbi)