Chinese EV maker Nio dangles ‘zero down payment’ in Shanghai to pursue sales target

Nio has only fulfilled less than 30% of its annual sales target.

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Chinese electric vehicle maker Nio has started a policy allowing buyers to go away with a new vehicle without initial payment at all, 36Kr reported Monday.

Customers will have to sign a 5-year installment loan contract with an annualized interest rate as low as 1.29%, a more moderate interest than the 5-year benchmark annual lending rate of 4.75% set by the People’s Bank of China, the country’s central bank.

The pilot plan, which is now only applicable in Shanghai, comes as the Chinese EV maker sold only 8,379 vehicles by the end of July, fulfilling only less than 30% of its annual sales target, expected to be between 40,000 and 50,000 units.

Nio delivered only 837 vehicles in July, including 673 5-seater ES6s and 164 7-seater ES8s, down by 37.5% month-on-month, KrASIA reported in August.

Nio’s founder and CEO William Li said the drop in the July delivery was because the company wanted to prioritize battery manufacturing over whole-vehicle production and distribution. About 5,000 vehicles were being recalled for repair as of late June due to safety concerns.

Li also said that a slowing Chinese economy and a decline in passenger vehicle sales were among the factors influencing Nio’s delivery.

Nio did not mention whether the new policy will be rolled out in other cities of China.