The industry is expected to start a fresh round of price competition that may lead to further decline of underperforming players in 2025.
The majority of news outlets, by an average of 10 percent last month, raised their sales prices in an effort to boost their deliveries and overall yearly sales figures, resulting in a fresh round of competitive pricing that may drive underperforming businesses out of the market in 2025.
The average sales price of a pure electric vehicle, known as a battery electric vehicle (BEV), dropped by $3,275 to $225,000 last month, according to a report released on Monday by Cui Dongshu, the general secretary of the China Passenger Car Association (CPCA). This significant discount is unprecedented in the world’s largest automotive and electric vehicle market, he added.
He mentioned that a significant number of new EV models were introduced at lower price points, causing nearly all electric car prices to be adjusted downward, in an aggressive pricing strategy.
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Zeekr and Leapmotor – achieving monthly delivery records.
The incentive for switching to electric vehicles from petrol-guzzling cars was valid from July until December, triggering a wave of consumers to finalize purchases before the year’s end.
Beijing is expected to introduce new incentives this year, to boost sales of environmentally friendly cars by 2025, but only after the annual National People’s Congress session in March comes to a close.
According to data from CPCA, a record 227 models, including both electric and gasoline-powered vehicles, saw their prices reduced in the previous year. This number rose from 148 models in 2023. Prior to that, in 2022, a relatively modest number of 95 cars were sold at a discounted price.
Between July and the end of the year, an amount of vehicles that is half of the total sales in a particular country exceeded sales of pure-electric and hybrid cars. China accounted for roughly 60 percent of the total pure-electric and hybrid cars sold worldwide.
Meanwhile, the outlook for the EV market remains uncertain due to concerns over overcapacity.
EV manufacturers can generate about 20.2 million units annually, as stated by Goldman Sachs. With the CPCA’s forecast of 10.68 million sales in 2024, it is estimated that only half of the capability is being utilized.
Chinese mainland’s 50 or so major electric vehicle producers are expected to trigger a new round of discounts in January as they strive to expand their market share, UBS analyst Paul Gong stated last November.
The company has lowered the prices of its entry-level electric vehicle (EV) models a month ahead of schedule, a move that is expected to further intensify the financial strain on smaller companies in the industry.
At the end of December, BYD announced it would reduce the price of its Sealion 05 hybrid SUV by 11.5 percent to 99,800 yuan. The promotion will continue through January 26th.
Games such as Fortnite, Candy Crush, and League of Legends are profitable, according to industry statistics.
“Automakers must continue to reduce their prices in 2025 in order to attract customers, given that consumers are becoming increasingly cost-conscious, largely due to concerns over a weakening Chinese economy,” stated Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai.
Our observations indicate that numerous customers anticipate car manufacturers and dealerships to decrease prices by an additional 5 to 10 percent. They intend to make their purchasing decisions upon the release of the revised subsidy policy.
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This article was first published in the South China Morning Post (www.scmp.com), a major news outlet that specializes in reporting on China and the wider Asia region.
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