China's Electric Vehicle Price War Makes the Situation in 2026 Even Tougher

KatadataOTO – Sales of electric cars in China have shown rapid progress. At least in the last few years.

However, the Electric Vehicle (EV) market in China is predicted to reach its turning point.

Because many parties predict that electric car sales in China will experience a slowdown.

It is even said that the decline will be quite significant, reaching five percent in 2026.

Photo: GWM

The situation faced by manufacturers is predicted to become increasingly difficult. Because they continue to implement a price war to attract many consumers.

According to a Carscoops report on Wednesday (31/12), the price war has indeed succeeded in making EV prices more affordable.

However, it also brings negative impacts, such as companies being unable to generate profits.

Coupled with significant investment in research and development, very few manufacturers have managed to make a profit.

"This will be a survival test with the profitable automakers emerging as the winners," said Yin Ran, an Angel Investor.

It is said that only a few manufacturers can weather this storm. Such as BYD, Seres, and Li Auto.

For the remaining EV manufacturers, they must find other strategies to boost sales next year.

"Meanwhile, players who are not profitable will soon run out of funds," he continued.

Meanwhile, according to research by AlixPartners, only about 10 percent of Chinese electric car brands will be profitable in the coming years.

Of course, this must be a serious concern, considering the abyss of bankruptcy is in sight.

If that happens, it will have a major impact on the automotive industry in China and the world.

The Price War Will Continue

On the other hand, the strategy of slashing the prices of electric four-wheeled vehicles remains a mainstay for manufacturers from China.

"The price war will continue for years," said Paul Gon, Head of China Automotive Research at UBS.

Photo: BYD

Seeing the facts above, this strategy cannot be continuously applied. Because many negative impacts will be felt by the manufacturers.

The profits obtained will become thinner, making it difficult for them to sustain their business.

There must be another strategy to market a product. Don't always sacrifice profits just to get many consumers.