Chinese EV Makers Engage in Competitive Price-Cutting

Chinese car manufacturers have recently reduced their prices on pure electric vehicles (EVs) by an average of 10 percent. This decision aims to boost deliveries and enhance yearly sales figures. This development has sparked a new wave of price competition within the industry, which might result in the exclusion of less successful players by 2025.

The average selling price of a battery electric vehicle (BEV) dropped by 24,000 yuan (approximately US$3,275), now standing at 225,000 yuan. This significant price reduction is a rare occurrence in the world's largest automotive and electric vehicle market, according to Cui Dongshu, who is the general secretary of the China Passenger Car Association (CPCA).

“The introduction of several new EV models at lower price points has led to a complete repricing of nearly all electric vehicles,” Cui noted. “The reductions in prices were conducted in an aggressive manner.”

The push for price cuts was accelerated by a subsidy program encouraging drivers to switch from gas-powered cars to EVs. This program has been active from July until December and has prompted many customers to make their purchases before the year concludes.

Looking ahead, it is expected that new incentives will be announced by Beijing in 2025 to promote the sale of environmentally friendly vehicles, although these won't be revealed until after the National People's Congress convenes in March.

Data from the CPCA indicates that last year saw a record number of 227 car models, including both electric and gasoline vehicles, having their prices cut. This is a noticeable increase compared to 148 models in 2023 and just 95 models in 2022.

electric, vehicles, competition