China’s EV price war is bigger than ever, but for how long?
China has recently gained a reputation for offering significant electric vehicle (EV) subsidies, and new figures from April show that the country’s discounts reached a record high of 16.8%, up 0.3% from March. While EV discounts are welcomed among drivers, the offers don’t appear sustainable, given that few of China’s EV makers are profitable.
There are around 50 active EV makers in China, the most out of any nation globally. However, only three Chinese EV makers are currently profitable: BYD, Seres, and Li Auto. BYD is the world’s largest automaker, Li Auto is Tesla’s closest rival on the mainland, and Seres builds AITO-brand intelligent vehicles. AITO vehicles are all-electric and hybrid vehicles with advanced driver assist systems leveraging technology such as LiDAR, HD cameras, ultrasonic radars, and more.
BYD
Last year, the difference between an EV’s selling price and an automaker’s production cost dropped from around 20% four years ago to 10%, Carscoops reports. Phate Zhang from CnEVPost said: “Nearly all of them were the victims of price competition. But if any of them chooses to exit the price war, their sales will decline and make it more difficult to post a net income,” according to the South China Morning Post. The China Passenger Car Association reported China’s average EV discount in 2024 as 8.3%. “Price reflects the balance between supply and demand. Price competition has turned fiercer this year. Unfortunately, we have not seen a jump in [EV] demand so far,” Nick Lai, head of auto research in Asia-Pacific at JPMorgan, said, according to the South China Morning Post. Battery electric vehicles (BEVs) also saw a 10% price cut in December. Additionally, expensive development and marketing costs weigh down many up-and-coming EV brands in China.
The value of exports in China’s competitive EV landscape
Lai highlighted strong exports as increasing Chinese EV makers’ profits since their vehicles experience bigger margins overseas. During the first four months of 2025, Chinese EVs represented 33% of the country’s total auto exports—up around 8% from the last two years, the South China Morning Post reports. In April, BEVs and hybrids were 33% of China’s mainland vehicle exports. BYD has differentiated itself in Australia, one of Chinese EV makers’ most competitive export destinations, by promoting low-rate finance alongside price cuts, especially for its plug-in hybrid (PHEV) lineup. Domestically, EVs were 43% of China’s car sales between January and April, up 2% year-over-year. JPMorgan’s financial report forecasts that Chinese EVs will represent 80% of the mainland’s auto market by 2030.
Seres
Final thoughts
According to the South China Morning Post, analysts predict that more minor players in China’s booming EV market will be acquired by larger rivals over the next two years or forced out altogether. Claire Yuan, director of corporate ratings for China Autos at S&P Global Ratings, said: “With persistent oversupply, the price war will prolong. Carmakers are introducing more low-price models to grab share in the mass market,” Nikkei Asia reports. April’s top-selling all-electric vehicle in China was the Star Wish sedan from Geely’s Galaxy EV brand. A base Star Wish has a range of about 192 miles and is priced at $9,500. Comparatively, Tesla’s Model 3 starts at about $32,688 in China.