“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.
Nio’s offer of free battery-swap service for the life of the car bolstered its May deliveries. The proprietary technology, which allows owners to quickly exchange a spent battery pack for a fully charged one, normally costs about 100 yuan (US$13.81) for each swap, with owners getting a free swap after four paid swaps.
In February, Xpeng offered a 20,000-yuan discount on its bestselling G6 sport-utility vehicle, which is 9.5 per cent off the price tag of 209,900 yuan.
China is the world’s largest automotive and EV market, where 44 per cent of new cars sold between January and April are driven by electricity, 12 percentage points higher than the same period in 2023, according to the China Passenger Car Association.
Shenzhen-based BYD launched a new and improved version of its plug-in hybrid technology on Tuesday, which enables a car to go as far as 2,100km on a single charge with a full tank of petrol, as the world’s largest EV maker encouraged more widespread adoption of battery-powered cars to ratchet up pressure on traditional carmakers like Volkswagen and General Motors.
Since February, the carmaker, which counts Warren Buffett’s Berkshire Hathaway among its shareholders, has slashed prices of nearly all of its cars by 5 to 20 per cent.
The prices of 50 models across a range of brands dropped by 10 per cent on average as other companies responded to BYD’s low price strategy, Goldman Sachs said in a report in April.