China's EV makers pin hopes on high-end models to buttress margins
According to SCMP, Chinese electric-vehicle makers are pivoting fast into the premium segment to escape cut-throat price competition. NIO, Zeekr and XPeng are targeting higher-margin territory with new models.
According to the South China Morning Post, China's electric-vehicle makers are accelerating their pivot to the premium segment as an exit strategy from the cut-throat price competition started by BYD. NIO, Zeekr and XPeng are targeting the price band above 300,000 yuan with new sedans and SUVs. The new models feature air suspension, advanced driver-assist systems and roomier interiors.
UBS analysis shows annual growth in China's premium EV segment has reached 32 percent, while mass-market growth has slowed to 6 percent. NIO chief financial officer Stanley Qu said 'premium models will be the main engine of margin improvement.' Goldman Sachs expects average gross margins for Chinese premium makers to rise about four percentage points over the next 12 months. Tesla's China market share is under pressure.
Chinese makers said European exports have shifted to higher-priced segments and that they have signed new dealership agreements in Türkiye, Germany and the United Kingdom. The premium-product pursuit aims to widen the profit cushion against EU tariffs. This article is not investment advice.
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