[News] China’s Auto Industry Faces New Price War as BYD Slashes Prices Early

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According to a report from Radio Taiwan International, citing South China Morning Post, price wars in China’s automotive industry have intensified due to fierce competition and overcapacity.

The report notes that with the Chinese government’s subsidy of RMB 20,000 for car replacements set to expire at the end of December 2024, the market had already anticipated promotional price cuts from major automakers at the beginning of 2025. However, China’s leading electric vehicle (EV) manufacturer BYD announced a nearly 10% price cut one month ahead of schedule, potentially triggering another round of aggressive price war.

BYD declared an 11.5% price reduction for its hybrid SUV Sealion 05 DM-i, with the promotional campaign running until January 26. The company aims to attract more customers before the Chinese New Year holiday, the report notes.

The report further highlights that, in addition to BYD, Tesla also lowers the price of its Model Y SUV in China by RMB 10,000 between November 25 and December 31, representing a 4% discount.

As noted in the report, the previous round of discounting in China’s automotive industry began in February 2024 when BYD reduced prices on nearly all its models by 5% to 20%. Over the following two months at that time, least 50 car models from various brands implemented price reductions of 10%.

According to data from the China Passenger Car Association (CPCA) cited in the report, between January and November 2024, 195 car models—including gasoline-powered, all-electric, and hybrid vehicles—experienced price cuts, exceeding the 150 models that underwent price reductions in 2023.

However, the report points out that while widespread price reductions have boosted sales volumes, they have not translated into profitability for automakers. Among China’s major EV companies, only BYD, Li Auto, and Huawei Technologies-backed Aito have been profitable, according to South China Morning Post.

The report from TechNews, citing CPCA data from BNN Bloomberg, reveals that from January to November 2024, the average profit margin for China’s car manufacturing industry was 4.4%, even lower than the 5% average profit margin recorded in 2023.

Read more

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• [News] Chinese EV Leader BYD Pressures Suppliers for 10% Price Cuts, Sparking Fears of an EV Price War

(Photo credit: BYD)