Chinese EV Makers Engage in Price-Cutting Strategy

In a bid to boost sales and deliveries, Chinese car manufacturers have lowered prices on pure electric vehicles (EVs) by an average of 10% last month. This aggressive price-cutting sets the stage for a new round of price competition in the industry, potentially sidelining many underperforming players by 2025.

According to Cui Dongshu, the general secretary of the China Passenger Car Association (CPCA), the average selling price for a pure electric vehicle decreased by 24,000 yuan, roughly equivalent to US$3,275, bringing the average price to around 225,000 yuan. Such significant discounts are uncommon in the world's largest automotive and EV market.

Cui further emphasized that numerous new EV models were introduced at lower price points, leading to a reevaluation of prices across almost all electric cars. This trend reflects an exceptionally aggressive approach to pricing.

The government had initiated a subsidy program to encourage the replacement of gasoline vehicles with EVs, which ran from July to December. Consumers rushed to finalize their purchases before the end of the year to take advantage of these savings.

Looking ahead, Beijing is expected to announce new incentives aimed at promoting the sales of environmentally friendly vehicles in 2025. However, these measures will likely be revealed after the National People’s Congress session concludes in March.

Data from CPCA indicates a remarkable increase in price cuts, with 227 models, which include both electric and gasoline vehicles, having their prices slashed last year. This marks a sharp rise from 148 models in 2023 and just 95 in 2022.

EV, China, Market