China EV price war to worsen as market share takes priority over profit, hastening demise of smaller players
- The three-month discount war has seen prices of 50 models across a range of brands dropping by an average of 10 per cent
- Goldman Sachs said in a report last week that the automotive industry’s profitability could turn negative this year
Falling prices could inflict heavy losses and force a wave of closures, triggering an industry-wide consolidation that only those with manufacturing heft and deep pockets would be able to survive, they said.
“It is an irreversible trend that electric cars will entirely replace petrol vehicles,” Lu Tian, head of sales for BYD’s Dynasty series, told reporters on Thursday. BYD, the world’s largest EV maker, aims to redefine some segments to offer the best products and best prices to attract Chinese customers, Lu added.
Lu did not say whether BYD would mark down prices of its pure electric and plug-in hybrid vehicles any further, after the company initiated a discount war in February by cutting price between 5 and 20 per cent to lure customers away from petrol vehicles.
The three-month discount war has since seen prices for 50 models across a range of brands dropping by an average of 10 per cent.