- One of China’s top automakers expects 2025 to be the start of an EV price war
- Cheaper EVs could spill out of China and result in lower prices across the globe
- This could be pivotal to EV adoption worldwide when consumers are thirsting for affordable electric cars
The EV industry is entering 2025 with more competition, complications, and politicized unknowns than ever. But even so, the expectation is that growth will continue to take off (more on this later) and it will be fueled by vicious cuts to the bottom line—or, at least that’s what China’s XPeng Motors’ CEO, He Xiaopeng, believes.
In an internal letter shared with CNEVPost, the CEO proclaimed that his bold prediction for the year is that the market is going to war. A price war, that is.
Photo by: Xpeng
“The market will definitely see fiercer competition in 2025,” said the CEO in a letter to XPeng staff obtained by CNEVPost. “And I can even make a bold prediction that price war will ignite from January.”
See, China’s EV market has been on a complete tear lately. Consumers have been lapping up domestic vehicles with a bottomless demand, and that’s led to a two-fold problem for the industry. First, it’s created a ton of competition. China’s EV industry has more than 100 EV manufacturers competing against one another, which will undoubtedly lead to some oversaturation that smaller automakers may not be able to sustain. And for those who have prepared themselves by producing more than the domestic market can buy, well, that sets them up for international success barred only by protectionistic measures put in place by other countries.
Enter: the domino effect.
XPeng believes the next two years will be crucial for its success. Currently, the brand has entered 30 different countries and regions. The brand expects to expand its presence to 60 by the end of 2026. That rapid explosion of growth will propel the automaker towards its goal of achieving at least half of its sales from overseas customers.
Needless to say, that means the EV price war could quite easily spill over China’s borders and onto the rest of the world.
China’s automakers are already looking for ways to overcome tariffs. For example, companies like Chery and SAIC have already set up shops where they import knock-down kits (incomplete vehicles that are then assembled locally to dodge tariffs on ready-to-sell imported EVs). Or, if automakers can get prices low enough, consumers in countries that tax EV imports at higher rates may be unphased by leveled-off prices. And if the U.S. reworks its tariff schedule under the Trump presidency to a lower while killing off the $7,500 EV tax credit for U.S.-built vehicles, all bets are off.
The bigger question should be: how will these automakers achieve lower prices? It could be government-laden subsidies, cost-cutting measures, or even taking a loss just to enter a particular market or segment. Either way, China’s EV makers already know that they need to keep up with one another or face going extinct in a quickly changing landscape.
