General Motors has recently announced a significant price reduction for its Cadillac Lyriq in China, following in the footsteps of Volkswagen’s move to lower prices for electric vehicles (EVs). The luxury crossover, built on GM’s Ultium EV architecture, will now start at 379,700 yuan ($52,466), down nearly 14% from its previous price of 439,700 yuan ($60,784), according to GM’s China website.
To further entice potential buyers, GM is offering an additional discount of approximately $2,500 to customers who place a deposit for the Lyriq in China before the end of August.
This decision by GM comes shortly after Volkswagen implemented price reductions on its EV lineup in China, where locally produced EV brands are gaining market share, intensifying competition and price pressure. VW’s partnership with state-owned automaker FAW recently introduced discounts ranging from 8% to nearly 27% for its ID-series of electric vehicles. Additionally, its collaboration with state-owned automaker SAIC provided a limited-time discount of over $5,100 for the ID.3 hatchback, positioning it below the popular Qin EV from BYD (002594.SZ).
As China’s leading foreign automaker, VW’s pricing adjustments in January sparked a trend among approximately two dozen automakers, including Tesla, to follow suit and reduce prices in order to stay competitive and stimulate demand.
China’s automotive market, the largest globally, is projected to experience an overall growth rate of around 3%, with EVs and plug-in vehicles seeing a significant increase in market share. According to AlixPartners, domestically produced Chinese brands are expected to exceed 50% market share for the first time this year.
While these pricing changes have positively impacted EV sales and market demand, industry analysts warn that the resulting intensification of competition over pricing and features could threaten overall profitability.
Recently, China’s auto association retracted a pledge made among 16 automakers, including Tesla, to avoid “abnormal pricing,” acknowledging that it would violate antitrust regulations.
GM’s Chief Financial Officer, Paul Jacobson, expressed optimism about the Lyriq’s potential in China. Notably, Cadillac sales in the country dropped nearly 8% last year, as reported by industry data.
While the Lyriq has experienced a gradual rollout since its introduction last year, its pricing in the United States remains unchanged, starting at just under $59,000.
In the first half of this year, GM sold 2,326 Lyriq units in the United States. Meanwhile, data from the China Association of Automobile Manufacturers reveals that 918 Lyriqs were sold in China during the first quarter. The association is scheduled to release first-half sales figures later this month.
GM also shared its second-quarter delivery numbers for China, reporting an increase of 9% with over 526,000 vehicles sold, including more than 115,000 EVs.
