The dominant question fielded by automotive executives at the Shanghai motor show was not about cars, batteries or exports but about the price war that has raged in the country since the start of the year.
The event gave them the opportunity to offload about an issue that is worrying many. “This price war has had an impact on the whole industry,” said William Li, CEO of Chinese premium EV maker Nio.
The trigger was pulled by Tesla, which in January cut the prices of its Model 3 and Model Y by up to 13.5%. This means the Model 3 now starts at just ¥229,900 (£27,000), placing what had been a premium car within the hot-contested midsize saloon segment into a strata that included more accessible models.
Both foreign and Chinese firms reacted accordingly. “It’s brutal under ¥300,000 [£35,000],” Tu Le, managing director of consultancy Sino Auto Insights, told Autocar. “Domestic EV companies are killing each other and the foreign legacies can’t even participate.”
Coming from Europe and the UK, the pricing of the latest EVs before discounts is eye-opening in China. The Model 3 costing the same as an electric supermini does over here is bad enough, but it gets worse when inspecting pricing for domestic makers.
At the Shanghai show, BYD, China’s largest EV maker, showed off its new Fiat Panda-size Seagull hatchback, which will go on sale from ¥79,800 (£9353). This isn’t another urban quadricycle but a genuine replacement for ICE equivalents with a base range of 190 miles.
There are discounts to be had on top. BYD was offering the equivalent of £1000 off its Seal saloon in March, cutting the start price to the equivalent of £24,000 for a car with a claimed range of 342 miles.
Those are the visible discounts. At dealer level, the giveaways are even larger, according to one executive at a China-based automotive company who didn’t wish to be named.
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