From January to September, a total of 195 vehicle models experienced price reductions, which exceeded the 150 models in the entirety of 2023 as well as the 95 models in 2022, according to Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA). Among various types of vehicle models, the price reduction of new energy vehicles (NEVs) is particularly significant, with price reductions of more than 13% for plug-in hybrid vehicles and pure electric vehicles.
More specifically:
- 71 gasoline-powered models were reduced in price, with an average price reduction of 15,000 yuan (2,140 USD) and an average price reduction of 9.3%
- 13 hybrid models were reduced in price, with an average price reduction of 15,000 yuan and an average price reduction of 8.4%
- 29 plug-in hybrid models were reduced in price, with an average price reduction of 24,000 yuan (3,420 USD) and an average price reduction of 13.7%
- 13 range-extender models were reduced in price, with an average price reduction of 14,000 yuan (2,000 USD) and an average price reduction of 7.6%
- 69 pure electric models were reduced in price, with an average price reduction of 23,000 yuan (3,280 USD) and an average price reduction of 13.5%
| Types | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 to date |
| Gasoline-powered | 184 | 63 | 29 | 54 | 53 | 71 |
| Hybrid | 3 | 4 | 2 | 1 | 4 | 13 |
| Plug-in hybrid | 10 | 4 | 7 | 8 | 15 | 29 |
| Range-extender | 1 | – | 1 | 1 | 7 | 13 |
| Pure electric | 14 | 23 | 23 | 31 | 71 | 69 |
| Total | 212 | 94 | 62 | 95 | 150 | 195 |
On the other hand, the price reduction of range-extender and hybrid models is relatively mild. At the same time, conventional gasoline-powered vehicles are affected by the price cuts of imported gasoline-powered vehicles. Additionally, driven by the price cuts of NEVs, some mid-to-high-end gasoline-powered vehicles have also begun to see significant price cuts.
Price reduction is one of the most important means to stimulate car sales. For some automakers, although sales have increased, they are selling the cars at a loss. Li Shufu, chairman of Geely, warned of the possible consequences of the price war resulting in cutting corners, counterfeiting, and selling fake products.
Source: Cui Dongshu
This makes sense.
Production costs of EVs will fall, until eventually they are cheaper than ICE – as they are much simpler to manufacture. They still have some way to fall. M
As the market shifts to EVs, ICE vehicles will have to cut prices to maintain sales. This will reduce the margin on these vehicles.