Published on November 14th, 2023 | by Sounder Rajen0
EV Price War Continues In China, Effects To Be Felt In Malaysia Next?
So will this ongoing price war mean EV sales here in Malaysia will get cheaper?
Chinese new energy vehicle (NEV) startup Leapmotor Technology, has considered offering the lowest sales prices and this may not really be a good thing anymore. So as we all should know by now, Tesla started the infamous “price wars” in China not too long ago which saw prices for many electric vehicles (EVs) drop drastically.
Joint ventures’ (JVs) EV sales in China were generally not as good as domestic NEV startups, mainly because of higher prices and inferior technologies. This has also led to carmakers not making any profit on cars sold simply to stay competitive. Now this may trickle down here for EV sales in Malaysia as well.
Moreover, new cars like the China made Venucia’s low price shows the EV brand’s resolution to achieve its electrification transition goal at any cost, according to industry insiders. So clearly, we know this is not a sustainable option and will likely end up seeing many manufacturers going bankrupt sooner or later.
An insider at Venucia said about the brand’s pricing strategy, “Only by achieving higher sales goals can we gain a position in the major market and have a sense of presence and a say in the market.”
On top of that, a highly competitive market tests companies’ operating efficiency, systematic competitiveness, scale merit, and cash reserves, a marketing staff at an automotive JV told a Chinese media agency recently, adding that these factors give multinationals and JVs confidence in the price wars.
China’s NEV market has experienced several rounds of price wars this year, with the latest round being this August, and saw more than 10 brands participating. On that occasion, Zeekr Intelligent Technology Holding, an EV brand owned by Geely Holding Group, cut the price of its Zeekr 001 by up to USD5,070 (about RM23,920).
Will the price war come stronger to Malaysia as the EV demand in the country heats up? Well, let’s see. While, in the short term this may not be such a bad thing as many Malaysians are struggling right now and EVs are, for the most part, too expensive anyway, but this will definitely force many automakers to shut down long term.
So what do you guys think? Will the EV price wars trickle down to Malaysia and if so, how long can it feasibly last before some or all EV manufacturers end up suffering too much of a loss to even stay in business anymore?