Advertisement
Electric & new energy vehicles
BusinessChina Business

Chinese NEV makers need to offer better value proposition to buyers as price war ‘unsustainable in the long-term’, says Fitch

  • Market penetration rate of NEVs in China is expected to reach 35 per cent this year and 50 per cent around 2025, Fitch analyst Yang Jing says
  • The price war among carmakers is also affecting battery makers, who are facing pricing and cost pressure

Reading Time:3 minutes
Why you can trust SCMP
Robotic arms assemble electric cars at Leapmotor’s plant in Jinhua, Zhejiang province. Photo: China Daily via Reuters
Elise Makin Beijing
Makers of new energy vehicles (NEVs) will make further inroads in China, with an annual growth rate in excess of 30 per cent this year, but they will have to think beyond price as the ongoing discount war is “unsustainable in the long-term”, according to Fitch analysts.
Advertisement

Lower battery costs could push down NEV prices in China in the second half of the year, accelerating the replacement of traditional internal combustion engine vehicles, they added.

“The market penetration rate of NEVs in China is expected to reach 35 per cent this year and 50 per cent around 2025,” Yang Jing, the director of Asia-Pacific corporate research, said on Thursday during the firm’s first in-person press conference in Beijing this year.

The penetration rate of NEVs jumped from 15 per cent to 28 per cent between 2021 and 2022.

02:01

Tesla owners in China protest against price cuts as consumers tighten budgets

Tesla owners in China protest against price cuts as consumers tighten budgets

The average Chinese car buyer was less likely to consider whether the car was powered by electricity or petrol, but instead look at a car’s functions and user experience for the price they can afford, which NEVs offer, she added.

Advertisement
Advertisement