BYD and Other New Energy Vehicle Firms Join Price War
With the price war among Chinese fuel vehicle brands accelerating, there are signs of a price reduction trend for new energy vehicles as well, according to a report by The Paper on April 12.
On April 10, Shenlan, a joint venture created under Changan, battery manufacturer CATL, and Huawei, announced the start of its “Shenlan Brand Anniversary Celebration” event. The starting price for the SL03 model was reduced from 168,900 yuan ($24568) to 149,900 yuan after subsidies were applied, a decrease of nearly 20,000 yuan. In addition, Shenlan also launched multiple user benefits worth 20,000 yuan, including warranty coverage and free charging piles.
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Subsidies and discounts offered by Shenlan are not unique. Several other new energy vehicle brands have recently launched similar promotional activities. Unlike the vague decline in prices and promotion models during March’s fuel car price war, the new energy vehicle brands have clearly announced their discount methods and amounts for relevant models.
On April 7, BYD’s Seal model launched a purchase activity with comprehensive discounts up to 31,000 yuan which includes cash subsidies of 15,000 yuan, a financial interest rate subsidy of 10,000, and a trade-in subsidy of 6,000 yuan. The official guide price range for BYD Seal is between 212,800-289,800 yuan. After cash subsidies are applied, the price drops below 200,000 yuan.
In addition, Geometry, a car marque under Geely, has also introduced limited-time subsidy policies this month that subsidize its Geometry E, Geometry G6, and Geometry M6 models up to 13,000 yuan with entry-level models generally seeing reductions around ten percent or so. The company said that this round of subsidies was due to cost reductions in new energy vehicles.
New energy vehicle models such as a subsidiary of Dongfeng Motor have also announced price reductions.
In the price reduction statements, many automakers mentioned the factor of battery raw material price declines. Since the beginning of this year, due to the slowdown in new energy vehicle demand growth and the impact of lithium carbonate and battery production capacity release, prices throughout the new energy industry chain have been falling, which has led to a decrease in power battery costs for new energy vehicles.
Many insiders expect that there will be a new round of price cuts for new energy vehicles after this year’s Shanghai Auto Show.
