Yahoo Finance China EVs: Xpeng cuts price of bestselling G6 SUV to maintain high sales volume amid intensifying competition
Chinese electric-vehicle (EV) maker Xpeng has cut the price of its bestselling G6 sport-utility vehicle (SUV) by about 5 per cent to sustain strong sales momentum, in the latest sign of intensifying competition in mainland China's fast-growing but crowded automobiles market.
The Guangzhou-based company said on Monday that the starting price of the G6 will be lowered by 10,000 yuan (US$1,400) to 199,900 yuan, and the discount will be effective until the end of this month.
Xpeng's move follows a campaign launched by BYD, the world's largest EV maker, this month. Shenzhen-based BYD offered discounts of up to 20,000 yuan - or 8 per cent - on its Han-branded EV sedan on December 1. Buyers of its Dynasty series EVs can avail discounts of at least 5,000 yuan.
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"Top EV makers have felt the pinch from an economic slowdown," said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. "A reduction in price is seen as the most effective way of attracting customers."
China's top EV makers including Xpeng and BYD are facing new competitors, such as smartphone vendor Xiaomi and search-engine giant Baidu, which are luring wealthy motorists away from the established players with smart EVs. The major EV makers are under pressure to stem losses amid escalating competition in the world's largest EV market. Crowded with 200 players, concerns are mounting over severe overcapacity.
Xpeng, for instance, reported a net loss of 3.89 billion yuan for the third quarter of 2023, up 63.4 per cent on year. Shanghai-based Nio, a domestic rival, posted a net loss of 4.56 billion yuan in the same period, 10.9 per cent wider than a year ago.
Xpeng began delivering the G6 in July before the SUV hugely bolstered the carmaker's sales volume between August and November. Brian Gu, the carmaker's president, told a media briefing in July that the company expected to deliver at least 10,000 G6 vehicles a month, and planned to increase production of the new model.
Last month, its delivery volume hit 8,750 units, little changed from October. The G6 deliveries in November represented less than half of Xpeng's total sales, which stood at 20,041 units, an all-time high.
The G6 has limited autonomous driving capability and can navigate the streets of China's top cities such as Beijing and Shanghai using Xpeng's Navigation Guided Pilot (X NGP) software, which is similar to Tesla's Full Self-Driving (FSD) system. The FSD has not been approved by Chinese authorities and is not available on Tesla vehicles sold in the country.
China's EV makers are on course to meeting an ambitious sales target, buoyed by mainland drivers' rising penchant for battery-powered cars. Deliveries of EVs hit a record 940,000 units in November, up from 883,000 units set in October, according to data by the China Passenger Car Association (CPCA).
That translates to a 35 per cent year-on-year increase in wholesale deliveries to 7.74 million units through the first 11 months of this year.
The CPCA forecast that a total of 8.5 million pure electric and plug-in hybrid cars would be delivered to dealers between January and December, a 31 per cent increase over 2022. Two out of every five cars sold on the mainland currently are powered by electricity.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
