Tesla, BYD and two other top Chinese electric car makers continue to implement sales incentives in early 2024.
This means that the brutal price war in the world’s largest auto market has extended into its third year.
Li Auto on Thursday announced a cash subsidy of 15,000 yuan ($2,055) per vehicle, as well as a three-year zero-interest financing plan, while Nio launched a similar package for buyers of its Nio and Onvo brands of electric vehicles. Zero-interest loan program Wednesday.
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The incentives are designed to encourage purchases ahead of the start of a government subsidy program in the New Year.
As of mid-December, more than 5.2 million vehicles sold had benefited from Chinese government subsidies.
State subsidies also boost sales
A $20,000 government subsidy helped electric vehicle assemblers hit sales records in December, according to one company Report The South China Morning Post reported on Thursday.
BYD sold 514,809 vehicles last month, “while NIO, Xpeng Motors, Li Auto and Leapmotor also saw significant growth.”
The Washington Post said that although subsidies may be cut, analysts expect electric vehicle sales to increase by 38% in 2024, but “intense competition among 50 major manufacturers” has stimulated price declines.
“Currently, only three electric vehicle manufacturers are profitable due to overcapacity concerns as the industry produces 20.2 million vehicles per year and is expected to sell approximately 10.68 million vehicles in 2024.”
China has said it will extend the trade-in period for consumer goods through 2025, but the specifics of the policy’s implementation nationwide remain unclear.
Nanjing, the capital city of east China’s Jiangsu province, said earlier this week it would continue to provide subsidies of up to 4,000 yuan per car this year.
Chinese authorities have agreed to release This year’s special national debt is 3 trillion yuanIt comes as Beijing steps up fiscal stimulus, partly through subsidy programs to revive the faltering economy.
BYD and Tesla offer discounts
Homegrown EV champion BYD has been offering discounts of up to 11.5% on two models, a hybrid and an electric car, since December and could surpass Ford and Honda in global sales by 2024.
Tesla, which sparked a price war last year, has extended discounts on outstanding loans for its best-selling Model Y in China until the end of this month.
Last year, sales of electric vehicles and plug-in hybrid vehicles (collectively known as new energy vehicles) in China exceeded 10 million, thanks to the government’s trade-in subsidy of up to 20,000 yuan for new energy vehicles.
Still, official data showed that auto-related retail sales shrank by 0.7% year-on-year in the first 11 months, while total retail sales of consumer goods in China increased by 3.5%, indicating the impact of price cuts.
- Reuters Additional input and editing by Jim Pollard
Note: On January 2, 2034, four paragraphs were added to the text of this report.
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BYD, Li Auto, and Xpeng Motors’ electric vehicle sales hit record high in September
