Nio, one of China’s homegrown Tesla challengers, has slashed the prices of all its models by 30,000 yuan ($4,200), the NYSE-listed premium electric vehicle upstart announced on Monday.

The news came as EV makers enter a price war in the world’s largest auto market, where BYD, the 28-year-old, Shenzhen-based company known for its affordable hybrid plug-ins, enjoys a significant lead.

From January to April this year, the Warren Buffet-backed manufacturer shipped about 600,000 vehicles, giving it a 35.3% share of the “new energy” market, which includes battery electric, plug-in hybrid and hydrogen fuel-cell vehicles, according to data from the China Passenger Car Association (CPCA).

Nio finished the first four months with a sale of just under 40,000 units and a modest 2.3% market share of the new energy vehicle (NEV) market. Founded in 2014, the EV maker has had its eye on the premium consumer market, with its priciest model stretching into the $70,000 stratum. With the new discount, the starting price of its cheapest model comes down to around 228,000 yuan ($32,000) on a battery-as-a-service base — Nio has made battery swapping its key selling point from inception and has built nearly 1,500 swapping stations to date.

Nio’s price cuts arrived just two months after its founder and CEO William Li said the company’s low gross margin prevented it from joining the price war and that blindless price cuts would only lead to unhealthy competition. Tesla has introduced several rounds of significant discounts in China, in some cases leaving its Shanghai-made vehicles 50% cheaper than those sold in the U.S. and Europe.

The American carmaker saw a surge in sales as a result. For the first four months of this year, Model Y accounted for 10% of all of China’s EV shipments and recorded a 60% increase in sales year-on-year, according to CPCA. Its aggressive price cuts prompted over 40 car brands to follow suit, and it now looks like Nio is also out of choice.

Along with the $4,200 discount, Nio is also ending its free battery-swapping services for new buyers. It remains to be seen if the price incentives can spur sales for its unprofitable business, which posted a $690 million net loss in the first quarter of 2023.

Nio said not to join China’s EV price war. Now it’s cutting $4K across all models by Rita Liao originally published on TechCrunch