Customers look at BYD Electric Cars on a car show in Yantai in the province of Shandong in East China on April 10, 2025.
Stringer | AFP | Getty pictures
Beijing – The competition in the Chinese market for electric cars has only more violent with consequences for the domestic economy and even the global car market.
Industry giant Byd Last week a number of discounts announced – some of almost 30% or more – over several of its models with only lower battery and hybrid models. The budget -friendly Seagull Compact Car sank to 55,800 Yuan ($ 7,750).
Other important Chinese car manufacturers started.
“BYDS campaign this time made the industry quite nervous,” said Zhong Shi, Analyst at the China Automobile Dealers Association, in Mandarin, translated by CNBC.
“The industry is in [a state of] Relatively big shock, “he said, noticing that smaller car manufacturers are now more concerned about their competitiveness.
The industry was a rare bright spot in an economy that recorded more slow growth and lackluster demand from consumers. Part of the latest attempt by Beijing to increase consumption included subsidies for new energy vehicles, a category that only includes battery and hybrid vehicles.
“The latest car price competition underlines how the imbalance of the offer continues to fuel the deflation,” said Robin Xing, chief china of Morgan Stanley, on Wednesday in a report.
“There is a growing rhetoric about the need to compensate [to more consumption]But the latest developments indicate that the old supply model remains intact, “he said.
The Chinese market for electric cars has been in a price war in the past two years, partly of funding through Tesla.
But this time traditional car manufacturers, including state possessions, feel considerable warmth, since the proportion of new energy vehicles is about half of the new passenger cars sold in China.
Last week, the chairman of Great Wall Motors, Wei Jianjun, warned of an “Evergrand” in the Chinese auto industry that has not yet had to explode, and compared the rapidly growing EV industry with the bloated real estate sector in the country. The pronounced car manager of the private sector spoke in an interview published on May 23 with the Chinese media -outlet Sina.
Once a China's real estate giant, Evergrande played its debts at the end of 2021 when the real estate market collapsed after Beijing used the company's high level of debt. The demand for houses also fell back for stricter government regulations, so that the developer had difficulty financing the remaining construction of pre -sold units.
When the Chinese media examination increased the financial situation of the car manufacturers, BYD lacked the reports on Wednesday that one of his dealers put pressure on an excessive pressure on the cash flow. The dealer, Jinan Qiansheng in the eastern province of Shandong, did not immediately answer a CNBC request for comments. BYD referred CNBC to his statement to Chinese media.
In the first few years of the state-supported efforts of China to become a worldwide leading provider in the aspiring electric vehicle industry, the Ministry of Finance announced that at least five companies have defeated the government of over $ 1 billion ($ 140 million). The high -ranking politics encouraged a flood of startups, of which only a handful of survived.
A price drops by 19% over two years
In China, the average car trade has dropped by around 19% to around 165,000 Yuan (22,900 US dollars) in the past two years, according to a Nomura report this week, citing industry data research institutes this week.
The price cuts for hybrid or range-extension vehicles have been far steeper in the past two years, while prices were only reduced by 21%, the report says. It was found that traditional cars with fuel drive had a below -average price cut of 18%.
In contrast, the average price of a new car in the United States in April was $ 48,699, which, according to CNBC calculations of data from COX Automotive, has increased almost 1% compared to two years earlier. The average price for electric cars in the past month was even higher 59,255 US dollars.
Byd's latest price sensitivity did not do it Visit the company's high -quality models, around 200,000 Yuan, such as the flagship Han Electric Limousine. Reuters pointed out that the latest model of the HAN published in February was about 10% cheaper than its former version.
The Chinese autogian, who was supported by Warren Buffett in the early years, quickly captured the market share in China in China with its wide range of cars at various prices. Last year, the company reported a net winner from 49% to 14.17 billion Yuan. The total liabilities rose by more than 60% to 57.15 billion yuan. Cash and cash equivalents went slightly to 102.26 billion yuan.
Price war to continue
Instead of reflecting on the market expansion, the double-digit growth of new energy vehicles in China in China will only go to the slice of Combusion Engine Cars from The Pie, Ying Wang, FITCH managing director APAC Corporate Ratings, told reporters on Tuesday. She noticed how the country's car market has not grown much since 2018, and expects the sales of cars to increase only by low single -digit digits this year.
Car manufacturers will continue to use prices in China this year, she said. Wang pointed out that companies consist that companies include more functions, such as advanced driver assist systems, instead of asking consumers to pay more than add-on for them.
Geely Backed Zeek said in March that it released its advanced driver assistant system free of charge, while Tesla tried to calculate its customers for a similar function. A month earlier, BYD announced that it brought more than 20 of its car models through the driver assistance functions.
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In the past few months, China's leading managers have increasingly demanded efforts to combat the non -productive business competition, which is referred to as “involution”. The term was mentioned in the annual work report of the Prime Minister in March and at the meeting of the market regulator last week, which “prescribes” comprehensive corrigifying “involved” competition “.
However, the massive efforts for the production of cheaper electric cars in China, and the subsequent step of the car manufacturers to expand into other markets, has increased the effects on the auto industry of other countries.
The European Union has hit tariffs for imports of electric cars from China after examining the companies in their production for the use of state subsidies. The United States also raised 100% for China electric cars and hoped that the vehicles could enter the world's second largest car market.
But in the EU, the tariffs only have a limited impact. In April, according to Jato Dynamics, BYD sold Tesla in Europe for the first time. According to the European Automobile Manufacturers' Association, Tesla's turnover has dropped by 49% this month.
– Bernice Ooi from CNBC contributed to this report