Three automakers, including a General Motors (GM) venture, are pushing electric vehicle (EV) pricing in China below the 100,000 yuan (US$13,894) threshold, reshaping the country’s auto sector. It launched the first salvo of a possible price war.
“2024 will be an important year for new energy vehicle companies as competition intensifies,” said Cui Dongxiu, general secretary of the China Passenger Car Association (CPCA). “Most auto assemblers plan to offer discounts and compete on price to maintain market share.”
BYD launches low-priced plug-in hybrid, sparking price war in China
BYD launches low-priced plug-in hybrid, sparking price war in China
On Monday, SAIC GM Wuling cut the price of its Xingguang hybrid sedan by 6,000 yuan to 99,800 yuan, and Changan cut the price of its sports utility vehicle (SUV) Qiyuan Q05 by 12,000 yuan to 73,900 yuan. , while Hozon discounted the material. The price of the X SUV has increased by 22,000 yuan to 99,800 yuan.
These price cuts follow BYD’s move over the weekend to offer electric cars priced under 100,000 yuan to compete with best-selling gasoline cars such as Volkswagen’s Lavida and Toyota’s Corolla.
“The decline in battery costs has enabled electric vehicle manufacturers to adopt pricing strategies that can compete with gasoline vehicle manufacturers,” said Zhao Zhen, sales director at Shanghai-based dealership Wanzhuo Automobile.
“With more Chinese motorists now preferring electric vehicles to traditional gasoline-powered vehicles, BYD and its EV counterparts will gain an advantage through lower prices.”
VW’s entry-level Lavida costs 94,000 yuan, while the basic Corolla costs 122,800 yuan. Currently, two of his five new cars sold in China are equipped with batteries.
Choi said EVs’ intelligent features, such as self-driving technology and sophisticated in-car entertainment systems, are gaining popularity among young drivers. Meanwhile, budget-conscious drivers are considering purchasing lower-cost EVs due to concerns about job prospects and wages.
According to CPCA data, 284,000 cars priced between 50,000 and 100,000 yuan were delivered to mainland customers in January, accounting for 14% of total mainland car sales.
However, Fitch Ratings warned last November that EV sales growth in China could slow to 20% in 2024 due to economic uncertainty and increased competition.