By ZHANG Mingrui
China's electric SUV market is one of the fastest-growing automotive sub-sectors globally.
The price war that has swept across China since last year has now blown into the electric SUV sector, dominated by BYD and Tesla.
Earlier this month, Tesla increased the price of its flagship SUV Model X by 19,000 yuan (US$2,500). BYD, on the other hand, has offered discounts on some of its new energy SUVs.
Better cost performance is the prime competitive metric in the electric SUV market. Models with better autonomous driving functions and longer ranges are now at prices much lower than expected. The Zeekr X, a compact crossover SUV developed and produced by Geely, is now 189,800 yuan, about 50,000 yuan less than the similar Tesla Model Y.
According to the China Association of Automobile Manufacturers, more than 1.5 million electric SUVs were sold in China in 2022. At this year’s Shanghai Auto, Volkswagen, BMW, and Toyota clarified their ambitions to boost their sales in China through electric SUVs. In terms of domestic brands, most new players also launched new pure electric SUVs at the show.
There are currently more than 90 models in the electric SUV sub-sector, at least 20 were unveiled in April alone. As the price gap between electric and fuel-powered vehicles narrows, fuel-powered vehicle sales are continuously losing power. Domestic penetration of EVs is expected to reach 36 percent by the end of this year. But all these new models have not only increased the competitive pressure in the electric SUV sector, but also squeezed profit margins.
Overseas brands such as Tesla and Renault have begun to export electric SUVs to Europe. For many domestic brands, the future also lies in exports. In Q1, export revenue more than doubled year-on-year. Electric SUVs are one of the main export models.
Ford CEO Jim Farley acknowledges that competition in the electric SUV market is driving China's auto exports. During his trip to China in April, Farley said that Chinese brands are flocking to Europe, which is a high-quality market for car exports.
Zeekr has already stated that Zeekr X will enter the European market soon. Exports of BYD's Atto 3 more than doubled in Q1 due to sales in the UK market.
