XPeng has announced a plan to reduce prices for its G3i, P5, and P7 models. The reductions range from 20,000 to 25,000 yuan for the G3i, 23,000 yuan for the P5, and 30,000 to 36,000 yuan for the P7.
The price of its G9 model, which was launched in September 2022, will remain unchanged. This move follows similar actions by Tesla China and Huawei-backed AITO. XPeng also plans to extend the warranty of the whole vehicle to 10 years and provide four years of basic maintenance for free for customers who ordered its G3i, P5, and P7 within one year before the price adjustment. Both XPeng and AITO failed to meet their sales targets for 2022.
Tesla’s recent price cut in China has caused a stir in the country’s new energy vehicle market. Since the beginning of the year, state subsidies for these vehicles have been removed and many car companies have raised their prices as a result.
However, Tesla’s reductions have resulted in a significant increase in orders and foot traffic in their stores. According to research by Xiangcai Securities, Tesla’s pricing will impact other new energy vehicle companies and intensify competition in the industry. Some experts predict that new energy vehicle manufacturers will face pressure in the first quarter of 2023 and will likely offer more incentives.
Despite this, it is worth noting that January is traditionally a slow sales period for cars in China, and this year, the absence of subsidies and rising battery costs have made it even more challenging for domestic automotive firms to follow in Tesla’s footsteps.
Cui Dongshu, Secretary-General of the China Passenger Car Association, suggests that from February to March this year, lithium carbonate prices may decrease and car companies may introduce new products and technologies with corresponding price reductions.
The cost gap between electric vehicles (EVs) and traditional gasoline cars has diminished with recent price changes. For instance, the starting cost of the Tesla Model 3 now closely aligns with that of gasoline-powered vehicles like the Passat and Magotan from joint ventures. Similarly, XPeng’s G3i is priced similarly to the Honda XR-V and Volkswagen Tharu.
