Nio again faces sluggish sales and fierce competition

Analysts at CMB International Global Markets said in a June note that Nio now faces a “dilemma between brand positioning and profitability”, while also lowering the company’s rating from buy to pending. .

While trying to cut costs, Nio also faces the seemingly contradictory task of pushing updated versions of its models to market. Within a month, Nio unveiled an improved version of its best-selling sport utility vehicle ES6 and a new wagon type of electric sedan ET5.

Additional versions may boost sales, but China’s new-energy vehicle market is currently moving from overcrowded to somewhat concentrated, with much larger companies such as BYD and Tesla gaining ground. there is

A loyal fan base was one of the pillars of support for Nio in its early days and a major factor in the company’s survival during its last downfall. Since its inception, Nio has fostered an aura of clubbing around the car by building his Nio House for his customers and hosting his gala dinners and events where customers can mingle and socialize.

But as the customer base grew, that sense of belonging faded. Some customers are a little offended by Nio’s price cuts, believing that it makes the brand cheaper.

Investors, and those who buy Nio cars, should expect the company to learn from its past troubles. Still, Nio still has ambitious plans to build 1,000 battery-swapping stations in China alone this year.

Estimated to cost about $140,000 each, this could soon become an expense Nio can no longer afford, even with $5.5 billion in cash and cash equivalents as of March 31.