China’s campaign to stamp out a ferocious electric vehicle price war seems to be having a limited effect, with all of the nation’s top 20 auto brands either keeping discounts intact, deepening them or only slightly reducing them in July.
With carmakers still grappling with overcapacity and lackluster consumer sentiment, seven brands offered bigger discounts despite Beijing’s plea in June to avoid "rat-race competition,” data from China Auto Market shows. The others either reduced their discounts a little bit or kept them unchanged. The level of promotions last month was higher than a year earlier also.
Such a muted response to the government’s pledge to curb aggressive price competition across the country — with a particular focus on EVs — shows how difficult it’s going to be to actually control behavior in the ultra-competitive market. Established manufacturers such as BYD and Tesla are dealing with the sudden rise of new entrants like tech giant Xiaomi, while automakers including Nio and Xpeng are releasing new models in a drive to win share.
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