China’s EV war: BYD, peers take discounting to new lows at expense of margins

EV makers slashed prices on 124 models from January to September, while prices on 71 petrol car models also cheapened, industry association says

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Visitors looking at a new-energy sports car at the World Intelligence Expo 2024 in Tianjin, China in June 2024. Photo: Xinhua

Published: 7:00pm, 10 Oct 2024Updated: 11:40pm, 10 Oct 2024

China’s electric-vehicle (EV) producers are cranking up price discounting to an unprecedented level this year to lure buyers. They are boosting sales at the expense of profit margins, leaving many struggling with cash crunches.

BYD, Xpeng, Li Auto and Geely Auto and other domestic peers have slashed prices on a record 124 EV models from January to September this year, according to data published by the China Passenger Car Association (CPCA). That has already surpassed the 97 models in all of 2023, it said.

This will fuel worries about the sustainability of the world’s biggest EV market, where some underachieving players are already fighting for financial survival. Almost all of the nation’s 50 major players have discounted their car prices, including 71 petrol cars, to beat competition, the association added.

“Price discounting became more aggressive in 2024 and the level of discounts offered by EV companies has reached a record,” Cui Dongshu, CPCA’s general secretary, said in an interview on WeChat. “The market is highly competitive and brutal.”

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BYD fired the first salvo in this round of price war, when it slashed prices on nearly all of its cars by 5 to 20 per cent in February. In all, carmakers cut prices on a total 69 all-electric cars by 23,000 yuan (US$3,249), or 13.5 per cent on average, the CPCA said. Prices on 29 plug-in hybrid models fell by 24,000 yuan, or 13.7 per cent.