# Analysis-Battle for China’s electric SUV market heats up at home and abroad Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-08 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: China's Electric SUV Market: Intense Battle for Meta Description: China's EV market is heating up with fierce competition in SUVs. Analysts predict tighter prices, abundant new models, and a surge in exports. URL: https://financedigest.com/analysis-battle-for-chinas-electric-suv-market-heats-up-at-home-and-abroadhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-08t011153z1lynxmpej47017rtroptp4china-suvs-pricing-1736814058934-compressed.jpg) # Analysis-Battle for China’s electric SUV market heats up at home and abroad SHANGHAI (Reuters) – China is ground zero for the price war in electric vehicles and the battleground is shifting to SUV-styled EVs, the largest segment of the market, dominated by Tesla Inc and BYD. The market, crowded with more than 90 models, is about to get even tighter with at least 20 new models of both Chinese and foreign brands launched in April, squeezing pricing and margins at home and driving exports, analysts and executives said. EV makers in China have followed Tesla’s bold price cuts by lowering prices for their own electric SUVs, cannabalising sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows, analysts said. The trend will spread abroad with [growing exports](https://www.financedigest.com/growing-exports-of-non-traditional-jamaican-crops-creating-sustained-opportunities-for-ackee-market-sale.html "Growing Exports Of Non-traditional Jamaican Crops Creating Sustained Opportunities For Ackee Market Sale") of China-made electric SUVs. We’re going to [see a lot of Chinese exports because of the ultra-competitive market in China](https://www.financedigest.com/china-equities-weigh-as-em-sees-another-month-of-outflows-iif.html "China, equities weigh as EM sees another month of outflows – IIF"). It’s actually going to be a [pressure release valve,”](https://www.financedigest.com/pressure-relief-valve-market-is-expected-to-register-highest-cagr-of-3-5-during-the-forecast-period-2021-to-2031persistence-market-research.html "Pressure Relief Valve Market Is Expected To Register Highest CAGR Of 3.5% During The Forecast Period 2021 to 2031:Persistence Market Research") said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights. The [market for SUVs has boomed in China over the past decade and now represents almost 40% of all cars](https://www.financedigest.com/adnami-continues-its-european-expansion-by-introducing-new-partnership-with-largest-pan-european-online-car-market-autoscout24.html "Adnami continues its European expansion by introducing new partnership with largest pan-European online car market AutoScout24") sold, with 400 SUV models of all fuel types. Almost as many China-made SUVs were sold in 2022 as cars of any type in Europe last year, or more than 11 million. The popularity of [electric SUVs has exploded since Tesla delivered its domestically-produced Model Y two years](https://www.financedigest.com/vw-to-speed-up-electric-shift-in-five-year-plan.html "VW to speed up electric shift in five-year plan") ago in China, making it one of the fastest-growing segments in the world’s largest auto market. ![](https://www.globalbankingandfinance.com/wp-content/uploads/2023/05/chart-7.jpg) Both domestic and foreign brands were represented among the new models rolled out at the Shanghai Auto Show in April. Legacy automakers Volkswagen, BMW and Toyota are counting on new electric SUVs to [bolster China](https://www.financedigest.com/taiwan-says-war-with-china-absolutely-not-an-option-but-bolstering-defences.html "Taiwan says war with China ‘absolutely’ not an option, but bolstering defences") sales. Made-in-China EV startups Xpeng and Nio have six SUV models and the EV-only [brands launched by Chinese state-owned car](https://www.financedigest.com/top-luxury-car-brands-in-the-world.html "Top luxury car brands in the world") companies, such as GAC’s Aion are also pushing all-electric SUVs. They will compete with 93 existing electric SUV models in a [market that saw 1.5 million sales](https://www.financedigest.com/how-cvas-and-insolvencies-can-help-sales-marketing.html "How CVAs and Insolvencies can Help Sales & Marketing ") in 2022, with the top 10 brands making up 84%, a Reuters analysis of data from China Association of Automobile Manufacturers (CAAM) shows. There were 76 electric SUVs in 2020 before Tesla started producing Model Ys in China, with [average annual](https://www.financedigest.com/average-annual-uk-grocery-bill-highest-since-at-least-2008-industry-data.html "Average annual UK grocery bill highest since at least 2008 -industry data") sales amounting to just 3,000 units. ![](https://www.globalbankingandfinance.com/wp-content/uploads/2023/05/chart-6.jpg) Despite recent minor [price hikes](https://www.financedigest.com/kraft-heinz-plans-more-price-hikes-as-sales-earnings-beat-estimates.html "Kraft Heinz plans more price hikes as sales, earnings beat estimates"), Tesla’s Model Y is still 20% cheaper in China than in early October, when the U.S. automaker grappled with [rising inventory](https://www.financedigest.com/oil-prices-slip-as-u-s-fuel-inventories-rise.html "Oil prices slip as U.S. fuel inventories rise"). ## DISCOUNT WAR Xpeng, Leapmotor and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off. Those refusing to slash prices on existing models to protect [brand value](https://www.financedigest.com/how-cfos-of-consumer-brands-can-create-new-value-relevance-at-scale.html "How CFOs of Consumer Brands can Create New Value & Relevance at Scale") have instead chosen to offer lower-than-expected starting prices for new models, along with longer driving ranges and greater autonomous driving features. For example, Geely’s premium EV brand Zeekr priced its new compact crossover Zeekr X from $27,500, 28% cheaper than [Model Y and almost the same price](https://www.financedigest.com/leno-bags-market-witness-a-spike-in-growth-pace-recent-improvements-in-pricing-models-fmi.html "Leno Bags Market Witness a Spike in Growth Pace Recent Improvements in Pricing Models: FMI") as Honda’s CR-V, first-quarter sales of which slumped 56%. Mitsubishi Motors also said last [week it had suspended for three months production of its Outlander SUV in China](https://www.financedigest.com/oil-hits-3-week-high-as-china-eases-covid-curbs.html "Oil hits 3-week high as China eases COVID curbs"). The reality is “brutal” for legacy foreign brands targeting the [mass market](https://www.financedigest.com/renault-considers-making-mass-market-evs-in-india-sources.html "Renault considers making mass-market EVs in India -sources") with small SUVs priced below $40,000, such as Ford, said Le of Sino Auto Insights. Ford’s chief executive, Jim Farley, acknowledged the intense market competition for two-row, SUV-styled EVs as a [factor driving](https://www.financedigest.com/insights-on-the-sputtering-target-global-market-to-2031-key-driving-factors-and-challenges.html "Insights on the Sputtering Target Global Market to 2031 – Key Driving Factors and Challenges") China’s car export boom. That’s why they’re going [big on Europe](https://www.financedigest.com/at-europes-big-banks-women-make-some-gains-despite-rose-exit.html "At Europe’s big banks, women make some gains despite Rose exit"). Europe is a premium [export market](https://www.financedigest.com/tissue-cultured-date-palm-market-pegged-at-us-4-5-bn-value-pool-in-2027-import-export-activities-take-a-downturn-amid-coronavirus-outbreak-future-market-insights.html "Tissue Cultured Date Palm Market Pegged at US$ 4.5 Bn Value Pool in 2027; Import & Export Activities Take a Downturn Amid Coronavirus Outbreak: Future Market Insights"). They’re all going there,” Farley said in April after a trip to China. Ford will also restructure its China operations to turn one of its [joint ventures](https://www.financedigest.com/bp-solar-joint-venture-expanding-in-australia-with-two-new-projects.html "BP solar joint venture expanding in Australia with two new projects") into an export hub for low-cost commercial electric and combustion vehicles, Farley said last week. General Motors, which saw [profit from China tumble by almost a fourth in the most recent quarter](https://www.financedigest.com/portugals-galp-quarterly-profit-up-62-below-market-forecast.html "Portugal’s Galp quarterly profit up 62%, below market forecast"), needs new EVs to be a success in order to rebuild its market share in China, but the pressure is intense. China has 100 vehicle brands vying for sales and a 50% capacity utilization [rate,” Chief](https://www.financedigest.com/ecb-should-raise-rates-at-steady-pace-chief-economist-says.html "ECB should raise rates at steady pace, chief economist says") Executive Mary Barra said. Tesla and Renault have already been exporting their China-made electric SUVs to Europe on a [large scale](https://www.financedigest.com/facebook-parent-meta-is-preparing-large-scale-layoffs-this-week-wsj.html "Facebook parent Meta is preparing large-scale layoffs this week – WSJ"). Tesla will begin shipping Model Y crossovers from its Shanghai plant to Canada, its first exports to [North America](https://www.financedigest.com/produced-water-treatment-systems-market-fuelled-by-strong-demand-in-north-america.html "Produced Water Treatment Systems Market Fuelled by Strong Demand in North America"), Reuters reported. Chinese automakers have their own plans to [grow electric](https://www.financedigest.com/electric-kick-scooter-market-is-projected-to-reach-6-5-billion-by-2031-and-estimated-to-grow-at-11-5-cagr-between-2021-and-2031.html "Electric Kick Scooter Market is Projected to Reach .5 billion by 2031, And estimated to grow at 11.5% CAGR between 2021 and 2031") SUV sales to Europe. Zeekr said it would bring the Zeekr X to [western Europe](https://www.financedigest.com/western-europe-medical-recruitment-market-is-estimated-to-be-valued-at-us-21-22-billion-by-the-end-of-2028.html "Western Europe Medical Recruitment Market is estimated to be valued at US$ 21.22 Billion by the end of 2028") while exports of BYD’s Atto 3 SUV more than doubled in the first quarter as it started taking orders there. The styling of it (Atto 3) is in keeping with the higher driving position, the good space,” said Mark Blundell, BYD’s head of marketing in Britain. “We just feel it’s a good start point for us in the UK.” ($1=6.9000 Chinese yuan renminbi) [(Reporting by Zhang Yan and Brenda Goh in Shanghai; Additional reporting by Nick Carey in London; Editing by Ben Klayman and Clarence Fernandez)](https://www.financedigest.com/london-reclaims-place-as-preeminent-global-financial-centre-for-the-first-time-since-2013-according-to-global-regulatory-outlook-report-from-duff-phelps.html "London reclaims place as preeminent global financial centre for the first time since 2013, according to Global Regulatory Outlook report from Duff & Phelps") --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---