China’s EV makers pare prices further pursuing lofty sales goals, but analysts say the cuts will end soon

EV makers offered an average 6 per cent discount in July, a smaller cut than during the price war earlier in the year, researcher says

‘Low profit margins will make it difficult for most Chinese EV start-ups to stem losses and earn money,’ an analyst says

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An Xpeng G6 electric vehicle is displayed at the Smart China Expo in Chongqing, China, on September 4, 2023. Photo: Bloomberg

Published: 5:00pm, 10 Sep 2023

Amid frantic competition, Chinese electric vehicle (EV) makers have launched another round of price cuts to lure buyers as they chase lofty sales goals for 2023. However, the cuts could be the last for a while as sales are already strong and margins are thin, according to analysts.

According to AceCamp Research, Chinese EV makers offered an average 6 per cent discount in July.

However, the research firm ruled out further significant price reductions because sales figures are already buoyant. The July price cuts turned out to be smaller than the discounts offered in the first quarter of the year, as the low-price strategy has already spurred deliveries amid an accelerated pace of electrification on mainland roads, according to analysts and dealers.

Sales of pure electric and plug-in hybrid EVs rose 30.7 per cent year on year in July to 737,000, according to the China Passenger Car Association (CPCA). Top companies like BYD, Nio and Li Auto rewrote their monthly sales records in July amid an EV buying spree.

Li Auto vehicles progress along an assembly line in Changzhou, in east China’s Jiangsu Province, on February 15, 2023. Photo: Xinhua

“Some electric car makers are resorting to the low price strategy to bolster sales because a discount makes their products attractive to budget-conscious consumers,” said Zhao Zhen, a sales director with Shanghai-based dealer Wan Zhuo Auto.