BYD leads price cuts as China NEV competition turns fierce

A NUMBER of domestic car companies have cut prices of several popular models of new energy vehicles, a prelude to a year of fierce competition in China’s NEV industry.

BYD brought two new models to the market on Monday with a price of 79,800 yuan (US$11,091). Rivals SAIC-GM-Wuling Automobile, Chang’an Qiyuan and Hozon Auto closely followed by lowering the price of certain models.

Among them, SGMW offered a price cut of 6,000 yuan for its 150 Advanced Edition, now priced at 99,800 yuan, while the price of both of Changan Qiyuan’s Q05 and A05 models dropped to around 73,900 yuan.

For the first time, buyers now have many choices in new-energy passenger cars for less than 100,000 yuan, especially plug-in hybrid models that BYD has mainly targeted for better sales.

BYD’s competitiveness is reflected in its advantage covering the whole industry chain against the backdrop that plug-in hybrids are usually priced lower than fuel cars, according to a report by China Times, a leading financial newspaper.

As the 2023 sales champion in China’s market as well as the global NEV market with annual sales of 3.02 million vehicles, BYD has a huge market impact.

Commanding core technologies and a strong vertical integration ability, BYD also claims a strong say in the whole industry, which contributed to its pricing initiative.

The annual sales and production scale of China’s NEVs reached 9.5 million last year, an increase of 36 percent year on year, ranking top worldwide for nine consecutive years, among which the growth rate of plug-in hybrid vehicle sales and production soared to 80 percent.

However, competition in the domestic NEV industry should not be underestimated.

BYD sold 201,500 NEVs in January, up 33.14 percent year on year. But the same month’s sales result was countered by Geely and Chery, with a similar scale of over 2 million.

“(The year) 2024 could be the first year when Chinese automobile brands fuel a brutal competition,” according to He Xiaopeng, chairman and CEO of Xpeng Motors.