Chinese electric vehicle maker Nio has staked out a contrasting position on pricing to its domestic rival, Li Auto, with a top executive suggesting that carmakers must prioritise profitability as material costs climb.

Nio senior vice-president Ji Huaqiang, in charge of manufacturing, logistics and operations, told reporters on Tuesday that perennially operating at a loss would be detrimental for any carmaker, even in the pursuit of market share.

“The recent spike in raw material prices has had a severe impact on auto assemblers,” Ji said during a media briefing. “Some players have turned out to be reasonable, as they planned to raise car prices to cope with the cost issue.”

Ji’s remarks came one day after Li Auto slashed the presale price of its new L9 sport-utility vehicle (SUV) by about 10 per cent, only to see its Hong Kong-listed shares plunge 14.2 per cent on Monday. They slid a further 4.3 per cent on Tuesday to close at HK$62.10 (US$7.92).

Nio is set to start selling its full-size pure electric ES9 SUV at the end of this month, with a price tag of 528,000 yuan (US$77,600). That is about 3.6 per cent higher than the discounted Li Auto L9 at 509,800 yuan.

While the two models compete directly, analysts note that budget-conscious Chinese consumers are increasingly favouring lower-priced options amid concerns about the economic outlook and wages.