China’s State Planner Issues a Warning About an Intense EV Price War Owing to Overstock

In a statement issued on Monday, China’s National Development and Reform Commission (NDRC) warned that, among other reasons, an excess supply of automobiles will lead to an intensified pricing war between plug-in hybrid and electric vehicle (EV) OEMs this year.

Out of 150 new automobiles this year, the NDRC expects around 110 new energy vehicle (NEV) types to be introduced, increasing market competitiveness.

The top three brands of new energy vehicles (NEVs), BYD, Aito, and Li Auto, have planned to raise deliveries by 2.3 million units for 2024, signaling an overstock problem, despite a projected market demand of 2.1 million units for NEVs, including EVs and plug-in hybrids.

According to the NDRC, price reductions for NEVs are anticipated to range from 5% to 10% this year, especially in places like Shenzhen where EV adoption is strong due to lowering battery prices and economies of scale.
According to the NDRC, BYD and Denza are leading the price reductions, with five models seeing price reductions of 7.15 to 9.7% in April compared to the start of the year.
Li Auto lowered the cost of four of its models, joining the likes of BYD and Tesla.