At a Beijing used car market, salesman Ma Hui expressed concerns that China’s electric vehicle (EV) industry is engaging in a damaging price war, particularly driven by market leader BYD. The extensive discounts—some as high as 34%—have significantly depressed profits for both manufacturers and sellers like Ma, who noted that many are losing money. The situation reflects not only domestic pressures but also accusations from international trading partners about flooded markets with cheap Chinese EVs.
The People’s Daily, a key Communist Party paper, recently criticized the “disorderly” price wars, warning that this approach threatens overall profitability and could harm workers’ income. Similarly, the chairman of Great Wall Motor likened the situation to the struggling property sector in China, suggesting an impending crisis in the automotive industry that has not yet fully materialized.
Organizations such as the China Association of Automobile Manufacturers have echoed these concerns, urging companies to avoid selling vehicles below production costs. They have subtly criticized BYD, suggesting its aggressive pricing strategies have incited broader panic within the industry.
Additionally, sellers at the used car market noted a troubling trend of “zero mileage used cars,” where vehicles are registered but not driven, artificially inflating sales figures. Ma warned that as prices continue to drop, potential buyers may hesitate to make purchases, opting to wait for further price reductions. This precarious situation highlights concerns regarding the sustainability of the current competitive landscape in China’s EV market, raising alarms about potential future ramifications for the industry as a whole.
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