The 'price war' in the new energy vehicle (NEV) market has reignited since the dawn of 2025, with leading automakers deploying various preferential policies to lure customers and secure market share. This round of competition is not only fierce but also exhibits fresh dynamics and trends.

As early as January 2025, hints of a price war emerged in the NEV sector. According to numerous media reports, industry giants such as BYD and Tesla spearheaded the new year's price battle through official price cuts, cash discounts, subsidies, and other incentives. BYD, for instance, offered limited-time discounts exceeding RMB 10,000 on its popular Qin PLUS EV Honor Edition and second-generation Song Pro DM-i models. Tesla, on the other hand, introduced a policy on its Chinese official website offering an immediate discount on the final payment for ready-to-buy cars, coupled with a five-year 0% interest financing plan, further lowering the barrier to car ownership.

In February, the price war intensified further. On February 5, Tesla China announced a limited-time insurance subsidy of RMB 8,000 for all Model 3 variants, along with a five-year 0% interest loan policy and special charging benefits, resulting in a subsidized starting price of only RMB 227,500. This preferential policy swiftly garnered a warm market response and was perceived as Tesla's new offensive in the Chinese market.

Following suit, automakers like XPeng and GAC Toyota rolled out similar incentive schemes. XPeng Motors unveiled the industry's first '0 down payment + 5 years 0 interest' car purchase offer, covering multiple models. Meanwhile, GAC Toyota implemented a system-wide price reduction for its SUV models, the Fenglanda and the Wildlanda.

According to incomplete statistics, since January 2025, over 30 automakers have adopted various price reduction measures, including New Year packages, subsidy guarantees, direct price cuts, 3/5-year 0% interest offers, and even 0 down payment promotions. This price war encompasses not only NEV makers but also traditional fuel automakers and joint ventures, signaling a widespread trend.

Multiple factors are fueling the resurgence of the price war in the NEV market. Firstly, as NEV technology matures and the market expands, competition among automakers has intensified, necessitating pricing strategies to capture market share. Secondly, the gradual phasing out of NEV subsidy policies has heightened this competition. To sustain sales and market share, automakers must adopt pricing strategies that appeal to consumers.

New Energy Vehicles Enter the 'Elimination Round'

The rapid growth of the NEV market in recent years has sparked intense competition among automakers and component manufacturers. However, as the market becomes increasingly saturated and faces challenges in technology, cost, and brand strength, a brutal industry shakeout has quietly commenced.

Data from the China Association of Automobile Manufacturers reveals that China's NEV sales reached 12.866 million in 2024, with the penetration rate surpassing the 50% threshold for the first time, marking NEVs' pivotal role in China's automotive market.

Entering 2025, however, the NEV market's growth rate began to decelerate, with annual sales expected to rise to 15-16 million, and the growth rate likely to dip below 30%, possibly even to around 20%. Despite continued sales growth, competition is intensifying, and many automakers and component manufacturers are under immense pressure.

To navigate this landscape, automakers are seeking breakthroughs. On one hand, they enhance product competitiveness through technological innovation and intelligent upgrades; on the other, they reduce costs and improve profitability by integrating resources and optimizing supply chains. However, not all automakers will survive this shakeout. Those with weaker capabilities, outdated technology, and insufficient brand influence may gradually exit the market.

In the NEV market competition, intelligence has emerged as a key arena. With the advancement of AI, big data, cloud computing, and other technologies, NEVs' intelligence levels are constantly improving. From assisted to autonomous driving, and from intelligent cabins to the Internet of Vehicles, intelligence has become a significant selling point for NEVs. However, this also poses higher demands on automakers' technical prowess and innovation capabilities. Only those automakers that continuously introduce new products and meet consumer demands can remain competitive.

Beyond intelligence, NEV market competition also extends to brands, services, channels, and other aspects. Some traditional automakers bolster their brand influence by launching NEV sub-brands and strengthening ties with internet companies. Conversely, new carmakers attract consumers through innovative sales models and attentive after-sales services. These competitive strategies not only elevate the overall NEV market level but also intensify market competition.

Notably, as the NEV market evolves, the related industrial chain is continually being refined and expanded. From core components like batteries, motors, and electronic controls to supporting services such as charging facilities and intelligent connectivity, the NEV industrial chain is forming a vast ecosystem. However, this also presents opportunities and challenges for industrial chain integration and mergers and acquisitions.

Powerful automakers and component manufacturers may expand their scale and enhance their strength through M&A activities, while weaker enterprises may face the risk of being integrated or eliminated.

Furthermore, NEV market competition is influenced by various factors, including the international trade environment, policy subsidies, and consumer demand. Rising international trade frictions pose challenges to NEV exports, the gradual phase-out of policy subsidies intensifies market competition, and consumer demand for NEVs is constantly evolving. These factors profoundly impact the NEV market's competitive landscape.

Industry Competition Intensifies in 2025

As 2025 unfolds, the NEV industry's competitive landscape is becoming increasingly fierce. Compared to 2024, this year's market battle exhibits an even more intense trend.

According to the latest data, China's NEV sales reached 10.899 million in 2024, marking a 40.7% year-on-year increase and a penetration rate of 47.6%. However, entering 2025, this growth rate has not abated. Instead, with more automakers entering the fray and technological iteration accelerating, competition has become even more cutthroat.

In 2024, China's NEV market witnessed multiple rounds of price wars and technological competitions. Leading automakers like BYD, XPeng, and NIO jostled for market share through price reductions, the launch of low-priced models, and the adoption of technologies such as extended range and hybrids. This intense competition persisted and further escalated in 2025.

From a market size perspective, the NEV market is expected to continue its robust growth trajectory in 2025. The China Association of Automobile Manufacturers predicts that China's NEV sales will exceed 15 million, with the penetration rate further increasing. This substantial market size has attracted more automakers, intensifying competition.

The acceleration of technological iteration is another crucial factor driving competition. With advancements in battery energy density, the popularization of 800V high-voltage fast charging, and the implementation of technologies like urban NOA, NEVs have significantly improved in driving range, charging speed, and intelligence. However, these technological breakthroughs also entail higher R&D and production costs, placing greater demands on automakers' technical and financial capabilities.

Brand and service competition are also heating up. In the NEV market, brand influence and service quality are crucial considerations for consumers when purchasing vehicles. Therefore, automakers are strengthening brand building and enhancing service quality, attracting customers through innovative sales models and personalized services. Simultaneously, automakers are actively seeking collaborations with internet companies to co-develop intelligent connectivity technology and elevate vehicles' intelligence levels.

With the global NEV market expanding, Chinese automakers are accelerating their overseas market expansion. In 2025, China's NEV exports are anticipated to maintain steady growth, with a growth rate of around 10%-20%. However, the overseas market presents numerous challenges, such as trade barriers and localized production. Thus, Chinese automakers must continuously enhance their globalization capabilities to navigate the competitive international market environment.

Amidst this fierce competition, weaker automakers are increasingly facing the risk of elimination. In 2024, several brands exited the market due to price war pressures. As competition intensifies further in 2025, more automakers are expected to confront existential crises.

To navigate this competitive environment, automakers must constantly adjust their market strategies and product portfolios. They must strengthen technological innovation and R&D investment to bolster their products' core competitiveness. Additionally, they must optimize supply chain management, reduce costs, and improve profitability. Simultaneously, they need to intensify brand building and marketing efforts to enhance brand awareness and reputation.

The competitive landscape in the NEV industry in 2025 is even more intense than in 2024. In this war without smoke, only automakers with robust technical strength, brand influence, service capabilities, and a global vision can stand out and emerge as market leaders.