Chinese Automakers Resist Beijing's Price War Crackdown with Continued Discounts

Chinese automakers resist Beijing's call to end electric vehicle price war, with most top brands maintaining or deepening discounts despite the government's plea to avoid aggressive price competition. Established manufacturers like BYD and Tesla face new entrants like Xiaomi, and are releasing new models to win market share, making it difficult for the government to control behavior in the ultra-competitive market. Foreign automakers in China appear to be taking heed of the government's plea, with average sales prices for European luxury brands like Mercedes-Benz, BMW, and Audi decreasing in July.

China's campaign to curb the electric vehicle (EV) price war has met with limited success, with most of the nation's top 20 auto brands either maintaining or deepening discounts in July [1]. Despite the government's plea to avoid aggressive price competition, carmakers are still grappling with overcapacity and lackluster consumer sentiment, making it challenging to control behavior in the ultra-competitive market.

Established manufacturers like BYD Co. and Tesla Inc. are facing new entrants such as tech giant Xiaomi Corp., while automakers including Nio Inc. and Xpeng Inc. are releasing new models to win market share. At BYD, the nation's top-selling carmaker, average discounts only dipped slightly to 7.5% in July from 7.9% in June, according to data from China Auto Market [1]. Similarly, Geely Automobile Holdings Ltd. saw a decrease in average sale prices to 104,300 yuan from 105,700 yuan in June [1].

Foreign automakers in China appear to be taking more heed of the government's plea. Average sales prices for European luxury brands such as Mercedes-Benz AG, BMW AG, and Audi rose in July, possibly due to the government ordering banks to stop auto loan partnerships that paid generous commissions to dealers [1]. Domestic EV maker Zhejiang Leapmotor Technology Co. also indicated that the government's campaign won't affect its pricing tactics, focusing instead on product features and cost reduction [1].

The expanded strategic partnership between SunCar Technology Group Inc. and NIO Inc. further highlights the growing competition in China's EV market. SunCar's stock surged 9.8% after announcing the partnership, which includes offering more detailed and customized auto insurance services to NIO vehicle owners [2]. This collaboration underscores SunCar's efforts to expand its footprint in China's growing EV market.

The government's directive to rein in the price war will likely face challenges, as carmakers continue to release new models and offer promotions to attract buyers. The success of the government's campaign will depend on its ability to balance the need for competitive pricing with the goal of long-term innovation and quality.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-27/chinese-carmakers-resist-beijing-s-call-to-end-brutal-price-war
[2] https://www.investing.com/news/stock-market-news/suncar-technology-stock-rises-company-deepens-nio-partnership-93CH-4212700