Chinese EV Makers Engage in Aggressive Price Cuts

In recent months, Chinese car manufacturers have significantly reduced the prices of pure electric vehicles (EVs) by an average of 10% in an effort to boost deliveries and enhance their yearly sales figures. This aggressive pricing strategy has sparked a new wave of price competition within the industry, which could lead to the phasing out of less successful players by 2025.

According to a report by Cui Dongshu, the general secretary of the China Passenger Car Association (CPCA), the average selling price of a pure electric car, often referred to as a battery EV (BEV), dropped by 24,000 yuan (approximately US$3,275), bringing the average price down to 225,000 yuan in the previous month. Such significant discounting is seldom seen in the world’s largest automotive and EV market.

Cui noted, “A large number of new EV models were also launched at lower prices, prompting almost all electric vehicles to be repriced. The price cuts occurred in a highly aggressive manner.” This trend highlights the competitive pressures that are influencing pricing strategies in the market.

The government-sanctioned subsidy program aimed at encouraging the switch from traditional combustion engine vehicles to EVs has been in effect from July to December. This initiative has driven consumers to make purchasing decisions quickly, trying to capitalize on the incentives before the year concludes.

Looking ahead, it is likely that Beijing will introduce new incentives this year to promote the sales of environmentally friendly vehicles in 2025. However, any announcements are expected to come after the conclusion of the National People’s Congress session in March.

Data from the CPCA reveals that last year saw a record-setting 227 car models, spanning electric and petrol vehicles, have their prices slashed, compared to only 148 models in 2023. In 2022, this number was much lower, with only 95 models available at a discounted price.

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