The escalating price war in the new energy vehicle sector has major automakers, including Tesla and BYD, slashing prices to capture market share. However, despite Tesla's larger price cuts compared to BYD's flagship model Han, both companies ended up with an equal market share in the third quarter.
A Wednesday report from JL Warren Capital revealed that Tesla's price reductions in China for its electric vehicles surpassed those of BYD's flagship model Han. However, it's noteworthy that BYD's pure electric vehicle market share (excluding Denza) has caught up with Tesla, with both companies holding a 17% market share in the third quarter.
Junheng Li, CEO and head of research at JL Warren Capital, provided a detailed comparison:
- Tesla's Model 3 saw a 6% price drop compared to last December, while the Model Y's price was reduced by 11%.
- In contrast, BYD's Han only experienced a 5% price reduction during the same period, although some of BYD's mass-market models saw price drops of 10% or 17%.
BYD's flagship Han is priced similarly to Tesla's offerings, both above 200,000 yuan, while most other BYD models are relatively cheaper.
Li also highlighted the rapid growth of new energy vehicles (including pure electric and hybrids) in the Chinese market, driven partly by government support. The penetration rate of these vehicles in the new passenger car market has soared to well over one-third and is expected to reach around 40% next year.
Electric vehicle sales are projected to grow by 20% next year, a slowdown compared to this year's 35% increase. The influx of new models in 2023 spurred demand for electric vehicles, but at the cost of accumulating inventory of "outdated" models, intensifying the price war.
Li noted that the sales targets set by major automakers this year were overly "ambitious." Among the 13 leading electric vehicle manufacturers in China, only Tesla and BYD are on track to meet their annual sales goals.
