Chinese electric vehicle manufacturers, including Nio and Li Auto, have joined market leaders like Tesla and BYD in extending purchasing incentives into 2025, continuing a price war in the world's largest auto market. Li Auto announced a cash subsidy of 15,000 yuan per purchase and a three-year zero-interest financing plan to stimulate sales before new government subsidy packages begin. This strategy underscores a competitive landscape driven by price sensitivity in the electric vehicle sector.
As part of ongoing efforts to revitalize the economy, local and national governments in China are propping up the automotive industry through substantial subsidy programs. Local authorities like Nanjing are providing additional subsidies of up to 4,000 yuan per vehicle, while Beijing plans to issue 3 trillion yuan in special treasury bonds. These initiatives suggest a concerted effort to foster consumer spending and bolster a faltering automotive market facing retail sales challenges.
While the overall sales of electric vehicles (EVs) and plug-in hybrids in China rose to over 10 million units, the auto-related retail sales saw a decline of 0.7% year-on-year in the first 11 months. This contrast—with total retail sales increasing by 3.5%—indicates that despite robust EV growth fueled by subsidies, the broader automotive market faces significant pressure from the ongoing price competition.
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