Chinese EV makers’ price wars in overseas markets will sow doubts over quality: Bain

Price competition among Chinese electric vehicle (EV) makers abroad is not sustainable since consumers will start to doubt the quality and reliability of the cars if they are frequently discounted, according to Bain & Co.

The global consultancy advises Chinese assemblers, which already enjoy a cost advantage over their international rivals, to focus on premium and expensive models when building their global image, rather than selling cheaper cars to lure budget-conscious consumers.

“Chinese companies have the potential to redefine electric cars so that they can convince global customers of their products’ competitiveness in performance and technology,” Helen Liu, a Bain partner, told reporters at a media briefing on Wednesday. “The pricing advantage will eventually run out of steam. It is product quality, technology and brand awareness that hold the key to Chinese carmakers’ success.”

In its latest report about Chinese companies’ globalisation drive and overseas investment strategy, Bain suggests EV assemblers set up production facilities in the regions where they aim to grab market share if they want to sidestep damage from the punitive tariffs on their cars.