Electric Vehicles: Price Competition and the Dual-Class Market
As the electric vehicle (EV) market evolves, the competition among manufacturers intensifies, particularly in the dual-class market. The China Passenger Car Association (CPCA) released a report on September 28, revealing that sales of electric vehicles surged by 73.6% in the first half of 2023 compared to the same period last year. However, despite this growth, the average transaction price of EVs decreased from 611,800 yuan to 536,730 yuan in 2024, reflecting a 12.3% drop.
By the first half of 2025, the market share of new energy vehicles is expected to rise to 36.7%, yet their share in the two-class vehicle market will only account for 5.3%, indicating a slower adoption rate compared to traditional vehicles. The CPCA’s data shows that while the average transaction price of new energy vehicles remains higher than that of traditional fuel vehicles, the gap is narrowing, with the average price of new energy vehicles being 43% lower than fuel vehicles over the last three years.
Despite this, there is a growing trend towards increased sales of new energy vehicles, which are projected to reach 68.7 million units in the first half of 2025, marking a year-on-year increase of 35.5%. This growth is higher than that of the overall market for passenger vehicles. During a recent visit to the auto market in Beijing, it was noted that while traditional fuel vehicles are still prevalent, numerous manufacturers are beginning to showcase new energy vehicles.
Manufacturers are responding to the competitive pricing strategies that have emerged in the market. Since 2022, there has been a notable trend of major brands adjusting their pricing strategies, which has contributed to a more stable pricing environment in the market. The CPCA predicts that the average transaction price for vehicles in 2025 will continue to decline.
The CPCA’s analysis suggests that the market for dual-class vehicles is already seeing significant adjustments. As the EV market continues to mature, manufacturers must focus on enhancing their product offerings and adapting to the evolving consumer preferences. The competitive landscape is set to intensify further as new regulations and incentives are introduced to promote electric vehicles.
In conclusion, the first half of 2025 is expected to witness a notable increase in electric vehicle sales, with manufacturers needing to adapt swiftly to maintain market relevance amidst evolving consumer demands and competitive pricing strategies.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/new-energy-vehicle-market-faces-price-war-as-electric-car-sales-surge-in-china/
