With more Chinese EV brands still going all out, will the price wars ever end?
Chinese electric vehicle (EV) makers, including Nio and Li Auto, are extending buying incentives into 2025, following in the footsteps of market leaders Tesla and BYD. This move comes as a price war in the world’s largest auto market continues for the third consecutive year.
These EV manufacturers are offering financial incentives and promotional schemes to stimulate consumer demand before the government’s new subsidy programs take effect in 2025. Li Auto made headlines on Thursday by announcing a cash subsidy of 15,000 yuan (approximately USD2,055 or around RM9,074) per car purchase, alongside a three-year zero-interest financing plan.
Moreover, this incentive is designed to make their vehicles more affordable and attractive to buyers, as they navigate the ongoing price competition in the market. Nio, a competitor in the EV space, followed suit with a similar zero-interest loan offer for buyers of its Nio and Onvo-branded EVs.
This offer was unveiled on Wednesday, further intensifying the race to capture consumers’ attention. The government’s role in these promotions cannot be understated. As of mid-December, over 5.2 million cars in China had benefited from government subsidies, encouraging the shift toward electric and new energy vehicles (NEVs).
The Chinese government has signaled it will continue to support the market by extending consumer goods trade-ins into 2025, though details regarding nationwide implementation remain unclear. The capital city of Nanjing, located in eastern China’s Jiangsu province, announced it would continue offering subsidies of up to 4,000 yuan (roughly RM2,428) per car purchase this year.
On top of that, the Chinese government is also ramping up fiscal stimulus, including the issuance of 3 trillion yuan in special treasury bonds, which are expected to further fuel economic recovery through subsidy programs.
Local EV leader BYD, which is on track to potentially outsell global giants like Ford and Honda in 2024, has been offering discounts as high as 11.5 percent on two of its popular models, one hybrid and one fully electric.
Despite these aggressive price cuts, the broader auto retail market in China has faced challenges. Auto-related retail sales dropped by 0.7 percent year-on-year in the first 11 months of the year, in stark contrast to a 3.5 percent rise in total retail sales across the country.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
