NIO Inc (NYSE:NIO), the Chinese electric vehicles maker, announced on Monday that it is cutting car prices by the equivalent of $4,200 effective immediately, and ending free battery swaps for new buyers.
This follows CEO William Li’s comments Friday that the company was delaying its capital expenditure and some research and development projects, CNBC reported.
He added that the delay is part of an effort to address the impact on cash flow from fewer car deliveries.
Its latest monthly figures showed that NIO’s deliveries fell to 6,155 cars in May, down from the first-quarter average of just over 10,000 vehicles a month and fewer than the approximately 13,350 cars delivered monthly on average during the fourth quarter.
NIO, however, said it targeting the delivery of at least 20,000 cars a month in the second half of the year.
On Friday, NIO reported that it had ended its first quarter of 2023 with cash and cash equivalents of 14.76 billion yuan, or $2.07 billion, as of March 31, lower than the comparable periods in 2021 and 2022.
Analysts at Mizuho Securities, though, were upbeat on the company’s prospects.
“Despite short-term headwinds, we believe NIO remains well-positioned with multiple upcoming ramps including its lowest cost SUV ES6, a multi-year EV adoption tailwind and market leadership in premium EVs in China, the largest EV market, EU/Global expansion, and an expanding product portfolio,” they wrote in a note on Friday.
Shares of NIO moved up nearly 5% in pre-market trading on Monday but are down more than 50% over the past 52 weeks.
Contact Sean at sean@proactiveinvestors.com