Chinese Auto Industry Accelerates Price War Triggered by Xiaomi... Discounts and Subsidies Included

NIO, Subsidies for New Car Purchases by Internal Combustion Engine Owners
Huawei, Xiaopeng, and Geely Automobile Also Join In

The launch of Xiaomi's electric vehicle has intensified the price war in the Chinese automobile market. Related companies have not only lowered their selling prices one after another but also announced subsidies, signaling a bloody competition ahead.

According to Chinese economic media Caixin on the 1st, Nio (Future Automobile) will provide an option equipment subsidy of 10,000 yuan (about 1.86 million KRW) to existing internal combustion engine vehicle owners who purchase its 2024 new model starting from that day. The subsidy budget is a total of 1 billion yuan and the promotion will continue until the budget is exhausted. This is to respond to the national-level demand to replace old consumer goods with new ones.

[Image source=Reuters Yonhap News]

The received option subsidy can literally be used for vehicle options. Paid options provided by Nio include exterior and cockpit color changes, special wheels, premium leather seats, voice navigation, and more. Caixin explained, "With this promotion, Nio stimulates and attracts new car buyers, while on the other hand, it can avoid buyers' psychological resistance through the effect of price reduction."

Prior to this, Nio launched a vehicle battery rental service and announced last month that the monthly prices for the standard and long-range battery packs were reduced by 35% and 49% respectively to 728 yuan and 1,128 yuan compared to the previous prices.

Currently, Nio is experiencing performance pressure due to sluggish sales. According to Nio, the company delivered 11,866 vehicles last month. Accordingly, Nio's deliveries in the first quarter totaled 30,053 units, a 46% decrease compared to the previous year.

[Image source=Reuters Yonhap News]

In the industry, Xiaomi's first electric vehicle SU7 was launched at a lower-than-expected price (standard model: 215,900 yuan), prompting competitors to rush to cut prices. On the same day, Aito (original title) M7, jointly launched by Huawei and Seres, lowered its starting price from 249,800 yuan to 229,800 yuan. Xiaopeng's G9 also announced a temporary price reduction of 20,000 yuan for this year's new model, selling it at 243,900 yuan. Geely Automobile released an upgraded version of the Krypton 007, pricing it 20,000 yuan lower than the existing entry-level model at 209,900 yuan.

On the other hand, Tesla announced that starting from that day, it would raise the domestic sales prices of the Model Y Long Range and Performance versions by 5,000 yuan each. However, through its official social media platform Weibo, Tesla also announced that both Model 3 and Model Y would temporarily offer a 12,000 yuan coloring option (Star Sky Gray color) for free.

An automotive industry expert told Caixin, "The current automobile market is a battlefield," adding, "Price cuts are competition, and incompetent companies will be forced to sell."

This content was produced with the assistance of AI translation services.