BEIJING (Reuters) – Chinese electric vehicle makers such as Nio and Li Auto have joined Tesla and BYD in extending buying incentives to early 2025 as the price competition in the world’s largest auto market enters its third year.
Li Auto revealed on Thursday its offering of cash subsidies worth 15,000 yuan ($2,055) per car purchase in addition to a three-year zero-interest financing program. Nio followed suit by introducing a comparable zero-interest loan plan for purchasers of its Nio and Onvo branded electric vehicles on Wednesday.
These incentives are designed to stimulate sales before the commencement of government subsidy schemes for the upcoming year. Up to mid-December, over 5.2 million cars had been sold in China benefiting from government subsidies.
While China has indicated plans to extend consumer goods trade-ins until 2025, the specific details regarding national policy implementation remain unclear. Nanjing, the capital of Jiangsu province in eastern China, declared earlier this week that it will continue offering subsidies of up to 4,000 yuan per car purchase this year.
Reportedly, Chinese authorities have approved the issuance of 3 trillion yuan in special treasury bonds for the year as part of increased fiscal stimulus aimed at rejuvenating the economy, including subsidy programs.
Local electric vehicle leader BYD, which potentially outperformed global giants Ford and Honda in sales in 2024, has been providing discounts of up to 11.5% on two models – one hybrid and one electric vehicle – since December. Tesla, which instigated the price competition last year, has prolonged a 10,000 yuan discount on outstanding loans for its popular Model Y in China until the close of this month.
The sales of electric vehicles and plug-in hybrids, collectively referred to as new energy vehicles (NEVs) in China, exceeded 10 million units last year, driven by government-subsidized trade-ins offering up to 20,000 yuan per vehicle. Nevertheless, data from official sources revealed a 0.7% year-on-year decline in auto-related retail sales in the initial 11 months, in contrast to a 3.5% rise in total retail sales in China, underscoring the impact of price reductions.
($1 = 7.2993 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan, and Brenda Goh; Editing by Mark Potter)
