NIO Subsidiary Fined $31,363 for Misleading Consumers

According to Tianyancha, the Auto Sales & Service Co. subsidiary of Chinese electric vehicle (EV) maker NIO, was fined 200,000 yuan ($31,363) by the Haidian District Market Supervision Administration of Beijing for violating the Anti-Unfair Competition Law.

The specific reason for the fine was due to the fact that one of the company’s salespersons had mistakenly publicized Beijing’s small passenger car purchase policy, misleading consumers to buy cars by renting passenger car indicators. Liu, the salesperson involved, had communicated with a potential customer, saying that the party concerned had cooperated with a third party and that if the buyer signs a personal lease agreement when buying a car, which would equal to about 43,000 yuan per month for 3 years or 63,000 yuan per month for 5 years, then he or she could be provided with the license plate quotas. By making this sort of offer, the salesperson is in violation of the country’s Anti-Unfair Competition Law.

In Beijing, Shanghai and other cities with restricted license plates, “a license plate is hard to get” has become a pain point for some local car owners. One Beijing car owner told Yicai reporters: “The quota of new energy vehicles in Beijing has adopted the waiting method, and it will take until after 2030.” In the auction of non-operating bus quota in Shanghai in November, the winning rate is only 5%.

Due to strict license plate quotas, license plate leasing has become a way for some car owners to solve their travel problems. In addition to NIO., Xpeng Motors introduced the offer to “rent a car with a license plate” in Beijing from August to September, 2019, to meet the demand of consumers who have no car purchase quota for the time being.

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Lawyers believe that what many people are doing in the market is not altogether in compliance with the law, especially as it pertains to evading policies. If the evasion of policy is used as a selling point for publicity, it may have an impact on the current management order, which is the main reason why NIO was fined for the infraction.