China’s EV makers return to fast lane helped by government subsidies tailwind
- Beijing will offer a subsidy of US$1,380 to buyers of EVs for replacing petrol cars and the incentive scheme will be available until the year-end
China’s premium electric car makers can expect a smooth road ahead of them in 2024 as both consumer demand and product margins improve, giving the assemblers a respite from a bruising discount war which has already resulted in the demise of several competitors.
Major players Nio, Xpeng and Li Auto, all felt the impact of the three-month race to the bottom, as prices for 50 models across a range of brands dropping by an average of 10 per cent. They are now forecasting a jump in sales for the three months ending June as government subsidies kick in and as consumers return to the world’s largest EV market where sales account for about 60 per cent of the global total.
“The subsidy for electric vehicle (EV) purchase gave top players a big boost,” said Phate Zhang, founder of Shanghai-based electric-car data provider CnEVPost. “There are also rising speculations that a fierce price war will end soon, which will help them increase vehicle margins.”
Beijing announced in late April that buyers of EVs which replace their petrol cars will receive a subsidy of 10,000 yuan (US$1,380) and the incentive will be offered until the year-end.
