China’s electric vehicle (EV) market has been hit by a intense price war, with industry leader BYD leading the charge in cutting prices. The move has sparked concerns among high-profile auto executives and used car sellers about the long-term sustainability of the industry.
BYD announced significant price cuts for many of its models in late May, with discounts as steep as 34%. Its cheapest car, the Seagull mini hatchback, now costs around $7,700, down from around $10,000. This move has triggered a chain reaction, with other companies following suit and reducing their prices even further.
The situation is so dire that some industry experts have likened it to China’s moribund property sector, which collapsed in 2020. Great Wall Motor Chairman Wei Jianjun called the automotive industry “unhealthy” due to the intense competition, drawing parallels to the Evergrande crisis.
Used car sellers, such as Ma Hui from Beijing, are also worried about the effects of the price war on their sales and profits. They fear that the fierce competition will lead to consumers delaying purchases due to the rapidly dropping prices, which could have a negative impact on the industry’s long-term prospects.
The Chinese government-backed China Association of Automobile Manufacturers has criticized BYD for its aggressive pricing strategy, warning that it could lead to a “race to the bottom” that would harm the entire ecosystem. BYD has dismissed these comments as alarmist and believes in fair competition.
As the price war continues, used car sellers are seeing a rise in “zero mileage used cars,” where vehicles are registered and plated but never driven. This phenomenon is causing concern among industry experts, who worry about its impact on consumers and the overall health of the industry.
The intense price war has raised concerns about the sustainability of China’s electric vehicle market, with some fearing that it could lead to financial stress and a decline in sales.
Source: https://www.cnbc.com/2025/06/10/china-electric-vehicle-ev-pricing-war.html