NIO to offer decremental monthly car subscription in China

Chinese electric carmaker NIO has upgraded its car rental service in several Chinese cities by offering a decremental fee for the monthly subscription and adding four free battery swaps. It’s an attempt to breathe new life into the subscription model that isn’t very popular with the Chinese, who rather want to buy a car as a status symbol.

According to cnevpost.com, a blog that closely follows Chinese EV makers, NIO previously charged a fixed monthly fee of RMB 9 888 (€1 410) for its cars, but now each car gets a different monthly fee that decreases as it gets older. Like Lynk & Co is doing in Europe, one can subscribe and renew on a monthly base without advance payment.

Decremental fees

As an example, NIO shows the fares for its 2020 ES6 SUV, with 34 000 kilometers driven, starting at 7 114 yuan (€1 015) in the first month, 6 661 yuan (€950) in the 12th month, and decreasing further month by month to 4 684 yuan (€668) after 60 months. That’s not cheap, but the general idea of decremental fees is refreshing.

The NIO ES6 is a large SUV with a 100 kW battery pack and an NEDC range of 610 km. Like all NIOs, it has a swappable battery that can be switched with a charged one at NIO’s swapping stations in just under three minutes.

Today, NIO focuses on being a high-end car brand starting with prices above 300 000 yuan (€39 400). Something which is reflected in the design of the cars. But it is planning to take on the mass market with a cheaper fully electric model range in the future.

“The relationship between Nio and our new mass-market brand will be like that of Audi-Volkswagen and Lexus-Toyota,” Chief Executive and founder William Li said in August last year.

Battery-as-a-Service

NIO batteries can be purchased with the car or provided with a Battery-as-a-Service (BaaS) formula. In that case, the batteries are owned and leased by the third-party battery asset management company, Weineng Battery Asset Company which was set up with China’s biggest battery manufacturer, CATL. As a result, consumers can have their battery pack swapped and upgrade or downgrade to different packs (70, 100, or 150 kWh) as needed.

Apparently, NIO is targeting this monthly subscription service to users wanting to rent a used car rather than buy a new one as a way to make more out of its second-hand fleet. The service is only available in 13 Chines cities, including the major metropolitan areas like Beijing, Shanghai, Hangzhou, Guangzhou, and Shenzhen.

Subscription service like Lynk & Co?

The Chinese brand made its entry in 2021 in Norway but announced to expand in Europe to the Netherlands, Germany, Sweden, and Denmark in 2022. By 2025 it wants to be present in 25 countries and regions worldwide. It didn’t say so far that it intends to offer the monthly subscription outside China.

So far, Lynk & Co, the Swedish-Chinese sister company of Volvo, also owned by Geely, is the only one offering a genuinely month-to-month subscription for the one car it provides in Europe, the Lynk & Co 01 (HEV or PHEV).

The latter can be rented at a fixed rate of €500 with 1 250 km a month included, all expenses included, and canceled on a 20-day notice. The ‘owner’ can ‘sublease‘ his car in short-term rental to other Lynk & Co ‘club members’ through the company’s app and network.

In its motherland China, that subscription formula isn’t offered (yet), opposite the NIO approach. In China, Lynk & Co only sells cars, as the Chinese tend to be more sensitive to owning a car as a status symbol than Europeans today, says the (Belgian) CEO of Lynk & Co, Alain Visser.