BEIJING (Reuters) – Chinese electric vehicle makers including Nio and Li Auto have followed market leaders Tesla and BYD in extending buying incentives to the start of 2025, as a price war in the world’s largest auto market continues for a third year.
Li Auto announced on Thursday cash subsidies of 15,000 yuan ($2,055) per car purchase as well as a three-year zero-interest financing scheme.
Nio launched a similar zero-interest loan plan for its Nio- and Onvo-branded EV buyers on Wednesday.
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The incentives are intended to encourage purchases before the government subsidy schemes for the new year start. More than 5.2 million cars sold as of mid-December had benefited from Chinese government subsidies.
China has signalled an extension of consumer goods trade-ins in 2025, but specifics for the policy implementation nationwide remain unclear.
Nanjing, the capital city of eastern China’s Jiangsu province, said earlier this week it would continue to provide subsidies of up to 4,000 yuan per car purchase this year.
Chinese authorities have agreed to issue 3 trillion yuan worth of special treasury bonds this year, Reuters has reported, as Beijing ramps up fiscal stimulus to revive a faltering economy partly via subsidy programmes.
Local EV champion BYD, which could have outsold Ford and Honda globally in 2024, has been offering discounts of up to 11.5% on two models – one hybrid and one EV – since December.
Tesla, which sparked the price war last year, has extended a 10,000 yuan discount on outstanding loans for its best-selling Model Y in China until the end of this month.
Sales of EVs and plug-in hybrids, known collectively as new energy vehicles (NEVs) in China, surpassed 10 million units last year, thanks to government subsidised trade-ins of up to 20,000 yuan apiece for NEVs.
Nonetheless, autos-related retail sales contracted by 0.7% year-on-year in the first 11 months, versus a 3.5% increase in China’s total retail sales, official data showed, pointing to the impact of price cuts.
($1 = 7.2993 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh. Editing by Mark Potter)
