(Yicai Global) June 27 -- Nio, the electric car startup seen as Tesla's main Chinese rival, issued a mass recall of its flagship sport utility vehicles over battery pack safety concerns and promised to compensate owners for all property losses due to the flawed batteries.
Nio will recall 4,803 ES8 models that have battery packs made between April 2 and Oct. 19 last year to eliminate potential safety hazards, according to the State Administration for Market Regulation's website. As of last month, the Shanghai-based company had delivered about 17,550 ES8s.
The recall comes after the model suffered three spontaneous combustions in the past two months, triggering widespread concern. An ES8 was being serviced in Xi'an, Shaanxi province, when it caught fire on April 22. One emitted smoke in a Shanghai underground garage on May 16, while another spontaneously ignited in Wuhan, Hubei province, on June 14.
The frequency of the incidents caught the attention of regulators. The Ministry of Industry and Information Technology ordered tougher safety inspections of new-energy vehicles and said it would punish automakers that fail to report safety hazards or fail to cooperate in accident investigations.
Nio promised to pay for all user and property losses from accidents related to battery quality problems, it said in the statement, adding that the 70 kilowatt-hour battery packs produced after Oct. 20 last year contain NEP102 modules that pose no safety issues.
Nio's shares [NYSE:NIO] fell 1.9 percent yesterday in New York to close at USD2.55 each.