(Yicai) April 1 -- The release of Chinese smartphone giant Xiaomi’s first electric car at a bargain price last week has sparked a new round in China’s car price war, with new energy vehicle manufacturers, including Nio, Zeekr and Avatr Tech but with the exception of the US’ Tesla, slashing prices.

Xiaomi took the market by storm on March 28 when its highly anticipated first electric car, the SU7, went on sale at a starting price of CNY215,900 (USD29,850), CNY30,000 (USD4,150) less than Tesla’s Model 3. Almost 90,000 orders were placed in 24 hours.

In the following days, other EV makers vied to match the price. Changan Automobile-backed Avatr Tech reduced the price of its Avatr 12, developed together with tech giant Huawei Technologies, by CNY35,000 (USD4,840) to CNY265,800 (USD36,760) on March 29. Today, Seres Automobile slashed the entry price of the extended range Aito M7, also developed with Shenzhen-based Huawei, by CNY20,000 (USD2,766) to CNY229,800 (USD31,782).

Not to be outdone, Nio said on March 30 that it is rolling out CNY1 billion (USD138.3 million) in subsidies for the replacement of gasoline-powered autos. People who swap their fossil fuel-powered cars for a Nio EV will get a discount of CNY10,000 (USD1,383). There are also discounts worth up to CNY29,660 (USD4,100) on Nio mobile phone vouchers, battery swap coupons and the right to use NOP+ for assisted driving.

Zeekr, the electric car arm of Geely Automobile, lowered the bar even further today when it reduced the starting price of its latest model, the Zeekr 007 that was released today, by CNY20,000 (USD2,766) to CNY209,900 (USD29,000), even less than the Xiaomi SU7. 

And the day before the Xiaomi SU7 was launched, Hangzhou-based Zeekr cut the price of its Zeekr 001 by between CNY31,000 (USD4,287) and CNY60,000 to between CNY269,000 and CNY329,000.

Competitors, such as Tesla’s Model 3, BMW’s i3 and Nio’s ET5T, are squeezing out the Xiaomi SU7 by reducing their prices, according to industry analysts. Tesla, which raised the prices of its China-made Model Y, may have hiked its prices to boost profit margins and maintain long-term growth potential.

Tesla has raised the price of its China-made Model Y by CNY5,000 (USD691) to between CNY263,900 (USD36,500) and CNY368,900, according to the website of the Austin-based firm’s China division. Together with the end of insurance subsidies and reductions on certain colors, this means that the price of the Model Y will increase by 23,000 (USD3181).

2024 is a key year for new energy vehicle companies to gain a firm foothold as plenty of new models will come on the market and competition could get very fierce, Cui Dongshu, secretary general of the All-China Passenger Federation, said earlier.

Editor: Kim Taylor