Price Wars Plague Chinese Car Manufacturers

Continued weaker demand for hybrid vehicles slowed the growth in China’s new energy vehicles to 12% in July from nearly 20% in June, according to official Chinese data published on Friday.

Overall Chinese car sales also saw slowing growth last month, as the government is trying to tackle the overcapacity in the vehicle manufacturing sector, which has led to price wars and losses for many automakers.

Total car sales in China grew by just 6.9% in July, compared to an 18.6% annual rise in June, per data from the China Passenger Car Association cited by Reuters.

Sales of hybrids only, including plug-in and extended-range hybrids, dropped by 3.6% in July from a year earlier, amid rising battery electric vehicle sales as battery technology and range improved. 

Despite the slower growth in new energy vehicles – BEVs and hybrids combined – these still outsold conventional gasoline-fueled vehicles, for a fifth consecutive month. 

The higher demand for BEVs helped some manufacturers post record sales in July—these include Leapmotor, Xpeng, and Xiaomi. 

However, market leader BYD, which relies on hybrids for a large part of its sales, reported a third straight month of falling sales in China in July. 

BYD’s share of the new energy vehicle market dropped to 27.8% last month from 35.4% in July 2024. 

The car manufacturing industry in China has been struggling with overcapacity and price wars in recent years. Overcapacity has been a persistent issue in China’s clean technology industries, undermining the profitability of solar panel and EV manufacturers.

The government is trying to remedy the situation with measures to curb excess capacity. 

In the EV market, “fierce competition among EV and battery manufacturers in China for state-based incentives has led to a sharp decline in EV and battery prices, helping scale deployment, but has led to massive overcapacity in batteries,” research firm Rhodium Group said in a report in June.  

The overcapacity, while helping global EV expansion, is undercutting new entrants.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com

 

  • Related Posts

    Indian State Firm BPCL Readies $3-Billion Bond to Fund Brazil oil Project

    Indian state-owned refiner Bharat Petroleum Corporation Limited (BPCL) prepares to issue a $3-billion bond to finance its share of a major offshore oil development in Brazil, as Indian companies move…

    EU Electric Vehicle Sales Hit Record as Fuel Prices Surge

    Record-high fuel prices and a record number of newly available affordable models have pushed electric vehicle sales in the European Union to an all-time high this year, Transport & Environment,…

    Have You Seen?

    Aramco CEO Warns Oil Inventories Are ‘Scarily Thin’

    • October 5, 2026
    Aramco CEO Warns Oil Inventories Are ‘Scarily Thin’

    EU Electric Vehicle Sales Hit Record as Fuel Prices Surge

    • October 5, 2026
    EU Electric Vehicle Sales Hit Record as Fuel Prices Surge

    Indian State Firm BPCL Readies $3-Billion Bond to Fund Brazil oil Project

    • October 5, 2026
    Indian State Firm BPCL Readies $3-Billion Bond to Fund Brazil oil Project

    10 minutes with… Altura Energy

    • October 5, 2026
    10 minutes with… Altura Energy

    Air Liquide uses AI in over one-third of ‘critical processes’

    • October 5, 2026
    Air Liquide uses AI in over one-third of ‘critical processes’

    AI chip demand to drive Air Liquide electronics sales above €4bn by 2030

    • October 5, 2026
    AI chip demand to drive Air Liquide electronics sales above €4bn by 2030

    Diesel Margins Slide as G7 Announces 100 Million Barrel Stocks Release

    • October 5, 2026
    Diesel Margins Slide as G7 Announces 100 Million Barrel Stocks Release

    Hormuz LNG Flows Still Down More Than 75% Despite Rebound

    • October 5, 2026
    Hormuz LNG Flows Still Down More Than 75% Despite Rebound

    Japan Rules Out More Reserve Releases After G7 Pledges 100 Million Barrels

    • October 5, 2026
    Japan Rules Out More Reserve Releases After G7 Pledges 100 Million Barrels

    South Korea Plans to Triple Canadian Crude Imports as Saudi Share Slips

    • October 5, 2026
    South Korea Plans to Triple Canadian Crude Imports as Saudi Share Slips