(Yicai Global) March 28 -- Struggling Chinese  new-energy vehicle maker Nio will not raise prices for its cars despite  the recently announced reduction in subsidies for the sector.

The Shanghai-based firm will bear the price  difference caused by the new policy regime that comes into effect next  month, Tencent news outlet QQ Finance reported.

The government has reduced subsidies in the sector  by around half on average compared with last year, according to a  finance ministry policy document on March 26, adding that all such  incentives will end in 2020.

The document requires local governments to stop  subsidizing NEV purchases, except for electric buses and fuel-cell  vehicles, after a transition period, which runs to June 25. It also  calls for the redirection of funding toward related infrastructure such  as charging facilities and hydrogen refueling stations, as well as the  improvement of other supporting services.

Founded in 2014, Nio rapidly expanded last year,  opening sales outlets and offering inflated salaries to lure in new  talent as its total workforce swelled by over 50 percent in the second  half to reach at least 9,000 by the end of 2018. The company's  development has been hampered after it revealed a net loss of USD1.4  billion for last year, cut staff and shelved plans for its own factory  in the country.

The firm started deliveries of its ES8 and ES6 sports utility vehicles last year priced between CNY350,000 (USD52,000) and CNY500,000.

The company will provide users with the central  government subsidy of CNY27,000 and a local one of CNY13,500, which is  40 percent less than that of last year It will cancel the local  government incentive after the transition period. 

The new subsidy policy aims to encourage the  development of high-technology products, the company, adding that it  will focus on high-performance and intelligent NEV production as well as  customer services to make it more competitive in after the financial  support ends. 

Editor: William Clegg