NIO Unleashes Imagination by Removing the Burden of Free Services and Introducing Flexible Upgrades

After adjusting the free battery swap frequency in April this year, NIO made a second move to this fundamental right.

On June 12, NIO announced through its official app that it had decided to adjust the prices of all new vehicles and the associated vehicle ownership rights after fully listening to user feedback and considering diverse service demands. Starting from June 12, the prices of all NIO new vehicles were reduced by 30,000 yuan, and some value-added services were no longer bundled with the vehicles. Before July 31, new vehicle users could choose to upgrade their rights for 30,000 yuan.

This limited-time upgrade package includes the previously considered basic right of four free lifetime battery swaps per month.

In response, NIO founder William Li explained during a user communication session that this adjustment simplified the basic rights and introduced a more flexible service model. As the core of this service simplification, after canceling the free battery swap service, users can pay per use without purchasing the rights upgrade package. Li also stated that NIO will introduce flexible charging and battery swap service packages in the future.

This is not the first time NIO has adjusted its battery swap service rights, but compared to the previous announcement of adjusting the monthly free battery swap frequency, the impact of separating the free battery swap rights this time is more profound. Li admitted during the session that NIO’s service system, especially its charging and battery swap network, has always been the company’s core competitive advantage. Internal discussions on this rights adjustment took months and lasted until 3 a.m. today.

“It was not easy for us to finalize the plan,” Li said. The complexity of the matter lies in the need to consider the interests of various parties, including new and existing users, especially providing a reasonable explanation to existing users. On the other hand, NIO needs to make choices based on different value judgments, considering that different users have different perceptions of the value of free battery swaps. Additionally, NIO has to consider the interests of shareholders and its own financial capacity.

Based on the market feedback after the release of the adjustment plan, NIO eventually found the optimal solution that balances the interests of all parties.

Unbundling the Rights: NIO Gives the Choice to Users

According to the official explanation, the optimal solution can be summarized as follows: a price reduction of 30,000 yuan and a subsidy of billions for existing users. For new users, the most immediate impact is that the price of the NIO flagship brand has more room to decrease. According to the latest prices after unbundling the rights, the starting price of the new NIO ES6 has dropped from 368,000 yuan at launch to 338,000 yuan, while the starting price of the entry-level model, ET5, has dropped to below 300,000 yuan. If the BaaS (Battery as a Service) model is adopted, the starting price will further decrease to 228,000 yuan, even lower than the domestically produced Model 3.

“I can’t really tell if it’s a price reduction or not,” Li said. It’s difficult to define this adjustment as a price reduction. While the numbers show a reduction, essentially NIO is monetizing and making explicit the service rights that were previously implicit in the vehicle. Each user has a different perception of the value of these service rights, and NIO is giving the power of choice back to the users with a unified price of 30,000 yuan.

According to Li, unlike when the free battery swap service was first introduced in 2019, the current situation is different as user demands have become increasingly diverse.

EV Evangelist, Passionate About Electric Vehicles/Mobility. Tune in on X : @HDEONEV