Some of the ET5 vehicles included in the recall are at risk of having their high-voltage wiring harnesses break and short-circuit in a severe head-on collision.

(Image credit: CnEVPost)

Nio (NYSE: NIO) is recalling hundreds of ET5 sedans, a rare recall for the company in recent years.

Effective January 6, 2023, Nio is recalling a total of 997 ET5 electric vehicles manufactured between September 7, 2022, and October 10, 2022, according to an announcement on the website of China's State Administration for Market Regulation.

In the event of a serious frontal collision, the front cabin shock tower may crush the high-voltage wire harness after being deformed by the impact, which in extreme cases may cause the high-voltage wire harness to break and short circuit with the body, posing a safety hazard, according to the announcement.

Nio will retrofit the high-voltage wire harness with a high-strength insulating protective cover for the vehicles within the recall free of charge to eliminate the safety hazard.

In addition, Nio will also provide affected owners with 10,000 Nio Credits, which are equivalent to RMB 1,000 and can be used to shop at the Nio Life online store, according to screenshots of the chat with Nio staff shared by car bloggers on Weibo.

The ET5 was launched on Nio Day 2021 in December 2021, with the first delivery on September 30, 2022. Including the battery, the sedan has a starting price of RMB 328,000 ($46,970), making it the cheapest Nio model.

The ET5 is built at Nio's F2 plant in NeoPark, with all of the company's other models built at the JAC-Nio F1 plant.

Nio delivered a record 15,815 vehicles in December, of which the ET5 was 7,594, contributing 48 percent of deliveries.

Since deliveries began in late September 2022, the ET5 has accumulated 11,813 deliveries, according to data monitored by CnEVPost.

Nio has suffered multiple operational problems in the past few months, and its founder, chairman and CEO William Li vowed in a January 1 internal letter to optimize the teams to improve on past issues.

Nio employees need to wake up to the fact that a number of the company's peers are outperforming the company in 2022, Li said.

Li outlined eight areas where Nio has fallen short, one of which was that software and hardware quality issues around the launch of Nio's new vehicles had affected product reputation.

He did not mention specific models but seemed to be referring to the company's flagship sedan, the ET7, whose first delivery was in late March 2022, at the beginning of the Covid lockdown in Shanghai, which affected quality control.

And today's recall of the ET5 reflects the need to quickly address the issues listed by Li.

Nio's quality team needs to reduce quality cost losses and protect customer interests and product reputation, Li said in his internal letter.

To view the full text of Li's internal letter, click here or the below link.

Full text: NIO CEO William Li's internal letter to employees