China’s Electric Car Market: A Fierce Price War and High Expectations for Smart Features

The Chinese electric car market has witnessed significant growth in recent years, accounting for 69% of global sales in December 2023 according to Rystad Energy. At the Auto China motor show in Beijing, Chinese giants in the automotive sector engaged in a fierce price war as they sought to attract new customers in the growing market of electric vehicles.

Chinese manufacturers have been expanding their presence in international markets, with Elon Musk referring to them as “the most competitive car companies in the world.” In China alone, there are 129 electric car brands, but only 20 have managed to capture at least 1% of the local market share. Chinese consumers, particularly those with high net worth, have high expectations for smart features in electric vehicles, which local manufacturers excel at providing.

At the Auto China motor show, companies like BYD, which briefly surpassed Tesla as the world’s largest seller of electric cars, will showcase their latest innovations. Traditional automotive giants, such as CATL and Toyota, are also present at the fair, introducing new technologies and collaborations to meet the demands of Chinese consumers for advanced functions in smart vehicles.

Amidst a growing price war in the Chinese market, companies like Li Auto and Tesla have announced price cuts for their models. The expansion of electric car production in China has raised concerns in the West about the impact on local competitors, prompting the European Union to launch an investigation into subsidies provided to Chinese manufacturers. Despite these concerns, Chinese companies attribute their success to innovation and supply chain efficiency rather than government subsidies.