Chinese authorities expect a more intense price war among electric vehicle and plug-in hybrid manufacturers this year as supply is expected to exceed anticipated demand.
Manufacturers will launch 150 new car models this year, including over 110 models of new energy vehicles (NEVs), which will result in fiercer competition, the National Development and Reform Commission (NDRC) announced on Monday.
New energy sources include batteries and a combination of fossil fuels and electricity in plug-in models.
Demand for electric vehicles and plug-in hybrids is expected to rise by 2.1 million vehicles, but the three leading brands of small electric vehicles, whose speed does not exceed 40 kilometers per hour, BYD, Aito, and Li Auto, plan to increase deliveries by 2.3 million vehicles, the commission notes, signaling an oversupply.
In such conditions, manufacturers will seek to attract customers with lower prices, with the additional incentive of lower battery costs and economies of scale, so discounts in Shenzhen, a metropolis that widely embraces electric vehicles, will range from five to ten percent, the NDRC announced.
The largest discounts are offered by BYD and Denza, whose vehicles in April were cheaper by 7.15 to 9.7 percent compared to the beginning of the year, according to the NDRC, and Li Auto is following their example.
