What’s new: New York-listed electric-vehicle maker Nio Inc. launched a used car service called “Nio Certified” on Sunday as price cuts from rival Tesla threaten to eat into its business.
The service lets Nio owners sell their vehicles back to the manufacturer, which will inspect, evaluate, buy and sell them on through its nationwide network, it said in a statement Sunday.
The company said Nio Certified would close the “service loop throughout the life cycle of NIO cars.” It plans to pour 3 billion yuan ($464 million) into the used car business.
What’s the background: Nio’s move comes as it faces mounting pressure from its U.S. rival Tesla, which started to sell its China-made Model Y at a price much lower than its imported models on Friday. Tesla’s Model Y now starts at 339,900 yuan, lower than Nio’s signature ES6.
William Li, CEO of Nio, said his company had been briefly impacted when Tesla started to deliver its Model 3, but that Nio would not follow Tesla’s price cut, even if future reductions saw Model Y cost less than 300,000 yuan as production capacity increased. He said that the average price of Nio vehicles was already higher than that of Tesla, so the two should not be considered direct rivals.
Li said that Nio does not hope to make a profit from the used car business itself but rather to protect the rights of current clients and enhance user retention.
Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
