After Beijing's call to end a brutal price war, EVs priced around US$13,888 have become the choice for budget-conscious consumers Chinese electric vehicle (EV) makers Leapmotor and Xpeng reported record sales last month, spurred by the popularity of their inexpensive cars, as a price war faded following Beijing's intervention to cool the market.
After EV builders held back on discounts and interest-free loans to comply with Beijing's call to end a brutal price war, intelligent battery-powered cars priced at around 100,000 yuan (US$13,888) became the primary choice for budget-conscious consumers.
Hangzhou-based Leapmotor, backed by Fiat owner Stellantis, broke its sales record for the third consecutive month, delivering 50,129 vehicles in July, up 4.4 per cent from June. The number represented a year-on-year jump of 127 per cent.
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Guangzhou-based Xpeng, partly owned by Volkswagen, delivered 36,717 cars to customers in July, up 6.1 per cent from the month earlier and a 229 per cent gain year on year. The volume beat the company's previous record of 36,695 units set in December.
"The two carmakers maintained their strong momentum because their vehicles were highly competitive in terms of both pricing and technological strength," said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. "Most consumers are opting for cheaper models due to worries about job prospects and wages."
Xpeng, viewed as a premium EV maker in mainland China, launched the Mona 03 midsize, fully electric sedan last August to take on Tesla's Shanghai-made Model 3.
The sedan, fitted with a preliminary self-driving system, is priced from 119,800 yuan, just half of the Model 3's 263,500 yuan.
Leapmotor is known for its cheaper smart EVs priced at around 100,000 yuan, attracting thousands of young motorists willing to embrace new technologies.
It has been one of the fastest-growing EV makers in China, the world's largest automotive and electric-car market. Nationwide deliveries between January and July this year soared 150 per cent year on year to 271,793 units.
Beijing, wary of risks arising from an EV price war, stepped in to police the market in May after a new round of price competition broke out.
The Ministry of Industry and Information Technology said on May 31 that authorities would punish carmakers that spearheaded price cuts, without specifying disciplinary measures. Many carmakers scaled back their deep discounts and loan concessions to heed Beijing's directives.
Demand for petrol cars and EVs on the mainland could weaken this quarter as manufacturers ended the price war, Fitch Ratings said in a report on Tuesday.
However, Fitch added that sales would rebound in the final quarter, with buyers seeking to capitalise on tax breaks on new-energy vehicle purchases that were due to be phased out by year end.
Under Beijing's drive to promote green vehicles and control emissions, mainland buyers have been exempt from paying a 10 per cent sales tax on purchases. However, those purchases will incur a 5 per cent tax from January 2026 to the end of 2027, and 10 per cent starting in 2028.
Xiaomi, a smartphone maker and EV start-up, said on Friday that its deliveries in July exceeded 30,000 units, without providing a specific number.
The company, which began delivering electric cars to mainland customers last year, emerged as another winner in the market after its first two models secured a large number of orders.
The company received 200,000 pre-orders for the YU7 electric sport-utility vehicle within three minutes of opening bookings at 10pm on June 26, with the number rising to 240,000 the next day.
Such a frenzy over a new EV is unprecedented in China, where monthly sales of 10,000 units for a single model are typically considered a success.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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