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China’s EV price war spreads overseas as carmakers chase market share, higher profit margins
- ‘When Chinese carmakers land in those markets in droves, price competition becomes inevitable, which eventually hurts their own interests,’ says industry player
- In Southeast Asia, Chinese EV builders are offering discounts in a bid to take on Japanese rivals whose petrol cars dominate
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Daniel Renin Shanghai
A price war among Chinese electric vehicle (EV) assemblers is spreading to overseas markets as more than a dozen players look abroad to bolster sales and chase higher profits to offset losses at home.
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In Southeast Asia, where battery-powered cars are becoming more and more popular, Chinese EV builders from established giants like BYD and Great Wall Motor to start-ups such as Hozon New Energy Automobile are offering discounts in a bid to take on Japanese rivals whose petrol vehicles dominate the market.
“Price competition is getting fiercer in markets outside China because more companies realise the lofty profit margin overseas can help them either stem losses or improve earnings now that it is difficult to make profits at home due to the discount war,” said Jacky Chen, general manager of Jetour Auto International, a subsidiary of state-owned carmaking behemoth Chery.
“This is not a good sign for Chinese automotive companies as we accelerate our pace of going global.”
China is the world’s largest automotive and EV market, with nearly four out of every 10 new cars taking to the streets powered by batteries.
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But the domestic industry, crowded with more than 100 companies, is now mired in overcapacity woes following the collapse of several underachieving players like WM Motor and Human Horizons.
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