EV discounts hit a record high in China

As of today, there are around 50 EV brands in the Chinese automotive space.

China is one country that has been at the top of the EV game. It has been bringing out models with cutting-edge technology and advanced battery systems at a rapid pace. But there is another story as well. Most of China’s EV brands are facing losses rather than making profits.

As of today, there are around 50 EV brands in the Chinese automotive space. Out of these, just three of them are thought to be profitable. These include BYD, Li Auto, and Seres. Despite this, brands are offering generous discounts on products, not worrying about financial security, but going for more sales.

According to a JP Morgan study in a South China Morning Post report, industry-wide discounts averaged a record high 16.8% in April, up from an already steep 16.3% in March. The China Passenger Car Association puts the average discount for 2024 at 8.3%. Apart from that, average EV prices were trimmed by 10% back in December.

Last year, the difference between the selling price of an EV and an automaker’s costs, including raw materials, labour, and logistics, known as the vehicle margin, dropped to 10%. This is down from approximately 20% just four years ago. Analysts believe that most of China’s smaller EV manufacturers will be out of the market or will be acquired by larger rivals over the next couple of years.

Chinese EV makers are betting big on exports, where there are better margins. According to JPMorgan’s Nick Lai, international sales are proving to be more profitable and could provide the breathing space these smaller companies need.

“Price competition has turned fiercer this year. Unfortunately, we have not seen a jump in demand for EVs so far,” Lai said. The domestic market, while massive, isn’t growing fast enough to offset the steep discounts.

In the first four months of 2025, EVs made up roughly 33% of China’s total vehicle exports, up from about 25% over the past two years.

Source: Carscoops