Nio Inc. (NYSE:NIO) Unveils Zero Downpayment Offer on Purchase Of Its Three EV Models
Chinese EV manufacture Nio Inc. (NYSE:NIO) has announced a limited zero downpayment offer for its vehicles as it looks to expand its sales.
Nio’s zero downpayment incentive to boost sales
The Shanghai-based automaker unveiled an attractive zero down payment offer for customers that want to buy any of its three electric car models. Customers can make purchases without making any down payment up to February 28, which is adequate time for the company to ramp up sales. However, this is not the first time the company is giving the offer to customers considering in September 2019 there as a similar feat. In 2019 the trigger for the offer was for the company to raise sales but it seems the latest offer is an attempt to compete with Tesla Inc. (NASDAQ:TSLA) in China.
In July 2019, the company delivered 837 vehicles but after the launch of the zero downpayment offer, the company sold 8,379 vehicles which were around 20.95% of its annual target.
Currently, to purchase a car in China one has to pay a down payment of 15%. The EV manufacturer’s offer its three SUV models, the EC6, ES6, and E8, that are available in China. Under the zero downpayment offer, a customer willing to purchase the ES6 EV with a 100 KW-hour battery back, which currently costs 416,000 Yuan before subsidies, will pay installments of 7,567 Yuan per month. Equally, the customer will pay 1,480 Yuan per month if they choose a three year repayment period plan under the option.
Nio’s incentive aimed at competing with tesla
Most importantly, the zero downpayment offer will lead to an increase in orders for the company’s EVs with lead times also likely to increase. The company looks to compete with Tesla which recently launched its Model Y cars in the country has launched Model 3 cars earlier. This could trigger price cuts for EVs in the country. Interestingly, Nio has been reluctant to cut prices for its vehicles for fear that it could damage its premium positioning and it is now considering innovative incentive offerings.