Rising Competition in the Extended-Range Electric Vehicle Market as Automakers Expand Offerings

This year, numerous automotive companies have announced plans to launch extended-range electric vehicles (EREVs). The Beijing Off-road BJ40 extended version, GAC Haobai HL, and Wanjie M8 have recently entered the market. Additionally, XPeng, which has primarily focused on pure electric vehicles, is set to release its first EREV later this year. EREVs have become a significant component of the new energy strategies for various car manufacturers.

At the launch event for the BJ40 extended version, Zhang Jianyong, the Secretary of the Party Committee and Chairman of BAIC Group, stated that the launch of the BJ40 extended version marks the beginning of a comprehensive upgrade for the BJ series, which will integrate new energy and intelligent technologies. The BJ40’s initial EREV model is equipped with a ternary lithium battery of over 40 kWh, offering a pure electric range of 152 km and a comprehensive range of 1200 km according to CLTC standards.

In recent years, the focus in the automotive industry has been predominantly on pure electric technology. However, due to the relatively low technical barriers, EREVs were initially viewed as transitional products. The explosive sales of EREV models from companies like Li Auto and Wanjie have demonstrated a market acceptance of EREV technology, particularly in addressing range anxiety and balancing fuel and electric costs. Consequently, more manufacturers are entering the EREV market.

Data indicates that by 2024, the production and sales of new energy vehicles in China are expected to exceed 12 million units, achieving a penetration rate of over 40%. Among these, EREV sales are projected to grow rapidly, reaching 1.18 million units, outpacing both pure electric and plug-in hybrid models. Particularly in the mid-to-high-end market segment priced above 250,000 yuan, EREV sales are forecasted to hit 710,000 units, with a year-on-year growth of 63%.

Duan Wei, Vice President of Chongqing Sairisi Phoenix Smart Technology Co., shared at the 2025 Electric Vehicle Hundred People Forum that in 2021, there were only four EREV models in the automotive market. By 2024, the number of newly launched EREVs will exceed 50. He believes that EREV technology has become one of the mainstream technologies in the new energy sector.

It is noteworthy that the current EREV models tend to be priced relatively high, especially those from Li Auto and Wanjie, which are generally priced above 300,000 yuan. However, this sector is gradually seeing price reductions. For instance, the official guidance price for the two models of the Beijing Off-road BJ40 EREV is set between 179,800 and 199,800 yuan, with a promotional price between 154,800 and 174,800 yuan.

According to Zhang Yanqing, Vice President of the Beijing Automotive Research Institute, the market shows that mid-to-large-sized EREV vehicles priced above 200,000 yuan and measuring over 4.8 meters in length account for over 90% of the EREV market share. However, with the rapid advancement of EREV technology, prices are continually decreasing, now falling within the 100,000 to 150,000 yuan range, and are expected to breach the 100,000 yuan mark soon.

“The characteristics of EREVs encompass all the advantages of pure electric vehicles, including the absence of range anxiety and lower costs compared to similar pure electric models. This makes them more suitable for areas with limited charging infrastructure and for long-distance driving, as well as for regions with extremely cold climates,” Zhang Yanqing added.

As competition intensifies in the market, the industry is shifting from scale expansion to technological innovation. Xu Min, Director of the Automotive Engineering Research Institute at Shanghai Jiao Tong University, pointed out that the current approach of “large range + large battery” is too costly for A-class vehicles. He recommends a shift to the “small range + large battery” strategy to balance performance and price.

Zhang Yanqing also noted that future EREV systems will continue to evolve in terms of miniaturization, efficiency, quiet operation, and intelligent management. The size of the EREV systems will be reduced through the application of technologies such as magnetic flux motors. Regarding efficiency, the goal is not only to enhance engine thermal efficiency but also to optimize engine performance regions. This will be achieved through system integration strategies that ensure the generator’s efficient operating range overlaps with the engine’s optimal operating conditions, maximizing energy output.