Photo by Steven Loveday

NIO is seeing a sharp drop in sales in China as sales of Tesla Model Y began in January at highly competitive prices. The California-based manufacturer, which has a plant in Shanghai, continues to command much of the local attention in China with its very popular new crossover model.

NIO reported it delivered 5,578 units in February in China, down from 7,225 units in January. This reflects a 22.8% decline--and a direct reaction to the Giga Shanghai-made Model Y market entry. At the beginning of the year, Tesla slashed the price of its SUV by 30 percent on its website, spurring an explosion in demand. Tesla Model Y Long Range costs RMB 339,000, while NIO's EC6 starts from RMB 368,000.

On January 1, Tesla began selling its domestic-made Model Y compact SUV at a price significantly lower than what it offered customers last June during pre-order. Thus, already by January, Tesla had sold 1,641 Model Ys. The number of sales for February should be released later this month. Tesla delivered 13,843 Model 3 sedans in January, according to the China Passenger Car Association.

“The market will see cutthroat competition in the premium EV segment as all carmakers including established brands and start-ups are aware of the huge potential and will try to lure more wealthy Chinese drivers through new model launches and promotional campaigns,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Tesla still enjoys the advantage in branding awareness, and Chinese start-ups and conventional carmakers such as Volkswagen will play a catch-up game,” he added.

Source: South China Morning Post

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