Electric car chaos: China's manufacturers are fighting in the price war!

Electric car chaos: China's manufacturers are fighting in the price war!

Recent reports paint a critical picture of the electronic car market in China, which is facing a phase characterized by intense price competition and declining profit margins. A video showing an electric car graveyard in China highlights the challenges many manufacturers face. A majority of the more than 50 active electric car manufacturers in China remain unprofitable, while only three companies - BYD, Li Auto and Seres - are considered successful. Analysts at JPMorgan Chase highlight that the industry's profit outlook remains negative, reinforced by an increase in discounts. Last month saw record discounts of up to 16.8%, up from 16.3% in March 2025. In 2024, the average discount was already 8.3%, according to the China Passenger Car Association (CPCA).

JPMorgan's Nick Lai notes that price wars have increased in the industry, with no increase in demand for electric vehicles. Pressure on profit margins could worsen further by 2024, as they are expected to fall to around 10%, compared to 20% four years ago. An increasing number of smaller companies could be forced to leave the market or be taken over by larger corporations.

Export and market share

Despite the internal challenges, the Chinese electric car market is showing impressive export figures. In the first four months of 2025, electric cars accounted for 33% of China's vehicle exports. In April 2025, 38% of this was accounted for by electric and plug-in hybrid vehicles. For the entire first half of the year, electric vehicles are forecast to account for 43% of total vehicle sales in China. Chinese electric vehicles are expected to hold 80% of the market share by 2030.

Compared to China, the global market for fully electric vehicles (BEVs) remains no less dynamic. Approximately 9 million BEVs were sold worldwide in 2023, an increase of 29% compared to the previous year. China remains the largest market with 5.1 million BEVs sold, accounting for 57% of the global market. Europe followed with 2 million BEVs (+27%), while the US recorded 1.2 million BEVs (+50%).

Market leader and future outlook

The leading manufacturers in the market are Tesla and BYD, which are at the top with 1.8 million and 1.6 million BEVs sold. The Volkswagen Group follows with 770,000 vehicles sold. The concentration of market shares is clear in the top 6 electric car manufacturers: In addition to Tesla and BYD, four Chinese manufacturers are also represented among the market leaders. Forecasts suggest that global sales of all-electric automobiles will be around 11 million in 2024, signaling moderate growth in the industry despite existential economic challenges.

In summary, the electric car market in China is facing significant challenges at the same time as global interest in electric vehicles is growing. While major manufacturers are coming under pressure from aggressive price reductions, high export numbers open up opportunities to increase profitability.