(Yicai Global) April 3 -- Nio will not participate in the price war waging in the world's largest car market, and Tesla has no power to define the price of autos in China, according to the chairman and chief executive of the Chinese new energy vehicle startup.

Blindly cutting prices will form a vicious competition in China's auto industry, Li Bin said at an industry conference recently. Nio's gross profit margin is too low for it to take part in the price war, Li added.

Tesla's Model 3 and Model Y are less complex in functions and configurations compared to Chinese car brands, such as BYD, so it cuts prices to challenge its rivals, Li noted. "Tesla can fix vehicle prices in the US with a market share of over 60 percent, but not in China, where it holds only about 7 percent."

US electric vehicle giant Tesla sparked China's auto price war in January. Since then, more than 40 electric and fuel auto brands have followed suit with discounts and subsidies.

Nio's gross profit margin fell to 13.7 percent from 18.9 percent last year from the year before because of the rising prices of lithium batteries and upgrading car models. The firm's gross profit margin will increase to between 18 percent and 20 percent in the fourth quarter this year, Li said during the firm's earnings conference call on March 1.

Shanghai-based Nio delivered 122,000 cars last year, up 34 percent from 2021. Its shipments rose 20.5 percent to 31,041 units in the first three months of 2022 from a year earlier.

Tesla's global vehicle deliveries rose 40 percent to 1.3 million in the 12 months ended Dec. 31 from the year before. Its shipments from China soared 48 percent to 710,000 autos, while it sold around 442,000 cars in the Asian country, according to data from an insurance firm.

The Austin-based firm's gross profit margin edged up 0.3 point to 25.6 percent in 2022. Its car sales in China climbed 7.6 percent to 33,923 in February from a year ago.

Editor: Martin Kadiev