The price reduction trend in mainland China’s automobile industry continues to spread, with several popular new energy passenger car models recently experiencing varying degrees of price cuts, pushing the average price for new energy passenger cars in September below 160,000 yuan. Analysts believe that overcapacity has led to intensified competition among car manufacturers.
According to the latest data from the China Automobile Dealers Association Passenger Car Market Information Joint Subcommittee (referred to as the Passenger Association Subcommittee), the prices of new energy passenger cars in September this year saw a significant decline, with an average price of 158,000 yuan. This marks the first time in nearly six years that the average price of new energy passenger cars has fallen below the 160,000 yuan mark.
Data from the Passenger Association Subcommittee shows that in September this year, the comprehensive promotional discount for new energy passenger cars increased to a mid-to-high level of 10.2%, up 2.6 percentage points from the same period, and a slight increase of 0.7 percentage points from August. In terms of pricing, the average price reduction for new energy passenger cars in September was 19,000 yuan, with the price reduction reaching 9.8%.
Specifically, the largest price reductions were seen in pure electric passenger car models. The average price of new pure electric passenger car models in September was 190,000 yuan. According to the Passenger Association Subcommittee’s data tracking on new car price reductions in September, models such as Dongfeng Fengxing Lingzhi pure electric, Qin PLUS, Ai’an RT, and Xingtu Yaoguang C-DM saw price reductions of over 10% compared to the lowest guided prices from 2023 to 2024.
Cui Dongshu, the Secretary-General of the Passenger Association Subcommittee, stated, “In September this year, the overall scale of price reduction for pure electric vehicles was significant, especially with some models seeing price reductions of over 10%, the depth of such reductions is quite remarkable.”
As reported by Deutsche Welle, local Chinese governments have been providing cheap land and subsidies to car manufacturers to boost production capacity and tax revenue, leading to overcapacity in the new energy vehicle sector.
Reuters has previously reported that many industry insiders and analysts in the Chinese automotive industry believe that the Chinese government’s new energy industry policies prioritize sales volume and market share under the goals of employment and economic growth, rather than profit and sustainable competition. With local governments providing cheap land and subsidies to car manufacturers for capacity and tax revenue, the Chinese automobile market is facing severe oversupply.
In a bid to capture market share, car manufacturers have engaged in a fierce price war that ultimately results in “selling more but losing more.”
Zhu Keli, Executive Director of the China Information Association and Director of the National Research Institute of New Economics, explained that the essence of the “price war” lies in the collision of overcapacity and insufficient innovation. After experiencing explosive growth in the new energy vehicle market, a large influx of capital has led to rapid expansion of production capacity. When market growth slows down, inventory pressure forces car manufacturers to reduce prices to clear stock.
Cui Dongshu, the Secretary-General of the China Passenger Association, previously stated in a post on October 7th that China’s new car sales have incurred massive losses this year, with widespread liquidity constraints among automotive dealers nationwide, facing the dilemma of “more sales, more losses.” Relevant authorities need to introduce corresponding measures to help alleviate the survival crisis faced by automotive companies.
The price reduction wave in the new energy vehicle market, while stimulating market growth, has also intensified consumer hesitation.
According to the “2025 Research Report on Trends and Marketing Strategies of China’s Passenger Cars,” data from the first half of 2025 shows that 82% of consumers were influenced by price reductions in their car purchase decisions.
Among the affected consumers, the proportion choosing to “further observe before purchasing” has significantly increased. Many consumers now perceive price reductions as a market norm and anticipate further discounts in the future.
The research report indicates that the ongoing price war has made non-essential car purchase groups more cautious in their buying behavior, leading to a lengthening of the car purchase decision cycle, making it difficult to generate short-term consumption stimulation.