A day after Nio, Inc. NIO announced that it is suspending production due to component shortages, the Chinese manufacturer reportedly said it would soon raise retail prices of its vehicles.
What Happened: Nio plans to hike the price of its vehicles as well as its battery-as-a-service rental prices beginning May 10, CnEVPost reported, citing a statement posted by the company on its app.
The proposed action comes in the wake of sharp increases in input prices, especially the prices of materials that go into batteries.
Nio plans to increase prices of all of its SUVs – the ES6, ES8 and EC6 - by 10,000 yuan ($1,571). The prices of Nio's recently-launched flagship ET7 sedan, and the ET5 mid-size sedan, due to be launched in September, will reportedly be kept unchanged.
The company also said the monthly rental fee of its long-range battery pack offered under the BaaS scheme will be hiked.
There was one consolation, which is that customers who either reserve or pay deposit for buying Nio vehicles before May 9 will not be affected by the changes.
The company once again called for understanding from customers.
After the spike seen this year, battery material prices are showing no signs of a let up in the near future, founder and CEO William Li was quoted as saying.
Why It's Important: Nio had thus far held off on hiking prices, despite EV pioneer Tesla, Inc. TSLA and most of its peers, including XPeng, Inc. XPEV and Li Auto, Inc. LI, announcing price increases. Tesla, in fact, announced multiple rounds of price increases, globally this year.
Nio's Li reportedly said that the company initially planned to bear the input cost inflation without passing it on to customers, but the COVID-19 outbreak in China made an upward adjustment inevitable.
The evolving geopolitical scenario poses risk to businesses, but it would be particularly damaging for Nio. After a not-so-enterprising 2021, Nio investors are pinning their hopes on a turnaround this year, given the slate of new product launches scheduled for the year.
Nio closed Friday's session at $20, down 1.77%.
Related Link: Will Nio's Newly-launched ET5 Pose A Threat To Tesla's Model 3?
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