Li Auto and NIO Opt Out of Chinese Auto Price War

Since the beginning of this year, a surge in reduced car prices has swept across China, prompting many vehicle companies to participate. Nevertheless, some companies, including Li Auto, NIO, Porsche, and Audi, have no intention of following suit.

Recently, Li Auto launched a user purchase price protection program that offers customers of their L-series vehicles (the L7, L8, and L9) a promise to refund the difference if the selling price of the vehicle decreases within 90 days of the original purchase. Customers must complete their vehicle order through official channels by March 31 to be eligible for this benefit.

Li Auto‘s decision to offer a price protection program may signal a firm stance to not lower the price of its vehicles. This position is backed by the company’s stable sales performance, which supports its resistance to the trend of reducing prices. Last year, Li Auto‘s December sales volume exceeded 20,000 vehicles. In the first two months of this year, the company delivered 15,100 and 16,600 Ideal models, respectively.

Furthermore, as the leader of the new energy vehicle sector, NIO has declared that it will maintain a stable pricing strategy and has no intention of reducing the price of its products. However, it is worth noting that in February, NIO released a series of policies to provide discounts on its “866” models (the ES8, ES6, and EC6) in order to boost sales. These policies included a series of preferential measures that offered savings of up to 100,000 yuan (~$14,500) per purchase.

SEE ALSO: Li Auto Emphasizes Gross Profit Margins, Competition with Tesla and Apple

In addition to Li Auto and NIO, several global luxury car brands have also announced that they will not be following the trend of price reductions in the Chinese market.

Markus Duesmann, the global CEO of Audi, has stated that the company will not blindly follow the price reductions in the Chinese market, but will instead observe the actions of its competitors carefully, as it could impact Audi’s strategic decisions. Similarly, Michael Kirsch, President and CEO of Porsche China, has affirmed that Porsche will not engage in excessive pricing and sales tactics nor follow the price reductions of other new energy vehicle brands.

Since Tesla initiated a price reduction and triggered a follow-up by new energy vehicle brands such as XPeng Motors and Aito, the price war has spread from the new energy sector to the traditional fuel vehicle industry. Nearly 50 car brands have participated in the price war through official reductions, subsidies, and other various forms.