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Electric & new energy vehicles
BusinessChina Business

Chinese EV makers Li Auto, Nio, Xpeng report sales surge as price war lures buyers but imperils profits

  • Among the domestic trio, Li Auto had the biggest month on month sales increase at 36 per cent and the biggest sales total of more than 35,000 cars

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EVs take shape in a factory of Nio. Photo: Weibo/ @Nio
Daniel Renin Shanghai
China’s top electric vehicle (EV) makers increased deliveries by up to 36 per cent month on month in May as promotional campaigns and low prices lured consumers, but analysts warned the earnings outlook is dire as a price war rages on.
Shanghai-based Nio handed 20,544 cars to customers in mainland China, beating a monthly delivery record of 20,462 in July 2023. Its May deliveries rose 233.8 per cent year on year and 31.5 per cent month on month. Deliveries by Beijing-headquartered Li Auto rose 23.9 per cent year on year and 35.8 per cent compared with April to 35,020 vehicles – the company’s highest total this year. Xpeng in Guangzhou reported a 35.2 per cent year-on-year jump and an 8 per cent month-on-month rise to 10,146 units.
BYD, the leading EV maker in China and globally, has yet to publish its delivery numbers for May. In April, the company handed over 313,245 electric vehicles, including plug-in hybrids and pure plug-ins, up 49 per cent year on year and 3.6 per cent from March.
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“It was expected that [EV] deliveries would rebound in May as the incentives offered by the electric-car makers could lure more customers away from petrol vehicles,” said Phate Zhang, founder of Shanghai-based EV data provider CnEVPost. “More drivers now opt for battery-powered cars and are convinced that they are value-for-money choices, particularly after the major players offer discounts to survive a price war.”

Constant price reductions will exacerbate the earnings outlook for the country’s EV makers, few of which have turned a profit, Zhang said.

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Nio’s incentives to encourage use of its battery swap technology bolstered the company’s May deliveries. The proprietary technology allows car owners to quickly exchange a spent battery pack for a fully charged one. Under the promotion, buyers of Nio vehicles that rent a swappable battery from the carmaker are exempt from paying 12 months of rental fees, which amounts to 8,736 yuan (US$1,206).

In late April, Li Auto, Tesla’s nearest mainland rival, reduced the price of all its vehicles by up to 5.7 per cent as it promised to improve its offerings for families, such as large vehicles fitted with household appliances.
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