Automakers such as BYD and SAIC Motor are not holding out hope for a ceasefire price war It angers China’s overstretched electric vehicle sector.
US carmaker Tesla began price cuts for electric vehicles in China at the end of 2022, prompting domestic competitors such as BYD. continue with their discounts. There have been temporary lulls in the fight, but China’s electric vehicle manufacturers are resorting to price cuts as they seek to increase market share.
Now, EV suppliers are being caught in the crossfire.
Maxus, state-owned SAIC Motor, demands a 10% discount from suppliers, the reports has China Securities Journal citing unnamed industry sources. A letter to suppliers sent on Monday is said to be asking for help in cutting costs as SAIC predicts EV oversupply will persist into next year.
SAIC Motor did not immediately respond to a request for comment.
This is the second report this week of a Chinese automaker claiming a discount. BYD — the market leader in China’s electric vehicle sector — also asked for a 10 percent discount from suppliers, according to an email from the automaker’s executive vice president He Zhiqi that was widely circulated on Chinese social media. received the local media. The email called for price cuts to begin on January 1.
luck He could not independently verify the accuracy of the letter, but a BYD public relations director could published claiming on its Weibo account that annual price negotiations are routine and discounts were not mandatory.
China has pushed fast development Since the early 2010s of the EV sector, many new EV startups have emerged, as well as several automakers transitioning to electric cars.
This has helped to create a highly competitive market for electric vehicles, while driving price cuts as a way to gain market share. That eats into margins, which is a problem for EV startups like Nio and XPeng that have yet to turn an annual profit. Pressure from suppliers to cut prices suggests automakers don’t see fierce competition ending any time soon.
The competition at home is tough pushing Chinese automakers will look abroad for new markets, but new tariffs in the US, Canada and Europe could be closing the doors on some of the world’s richest economies.
Instead, Chinese automakers are targeting “smaller but more significant” markets for growth, such as Thailand, Mexico and Brazil, which sometimes have such a tumultuous geopolitical relationship with Beijing.
