Why competition is heating up in China’s sub-US$20,000 EV segment

Apart from hefty price discounts, carmakers are offering more bells and whistles in their latest models to stand out from the crowd

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The BYD Seal 06 can self-park and has voice-activated recognition capability, enhancing its competitiveness in the sub-US$20,000 segment. Photo: AP

Published: 11:18am, 9 Jun 2025Updated: 5:28pm, 9 Jun 2025

Competition in mainland China’s budget electric vehicle (EV) segment is likely to intensify as consumers seek value for money, according to dealers and analysts.

With at least a dozen intelligent EVs under 150,000 yuan (US$20,864) – from BYD to Leapmotor – qualifying for up to 20,000 yuan in subsidies, consumers are spoiled for choice. At the same time, a fierce price war is pulling in budget-conscious buyers.

“Consumption downgrade has spread to the car market as consumers are increasingly shunning expensive models,” said Zhao Zhen, a sales director at Shanghai-based dealer Wan Zhuo Auto. “But leading Chinese carmakers are able to churn out high-performance EVs at about half the prices of Tesla’s Model 3 and Model Y.”

Conventional and battery-powered cars priced between 100,000 yuan and 150,000 yuan accounted for a third of overall sales, or about 7 million units, on the mainland last year, according to data from the China Passenger Car Association (CPCA).

Xpeng chairman and CEO Xiaopeng He and brand ambassador Ouyang Nana pose for photos with the Mona M03 Max EV at an event in Beijing on May 28. Photo: AP

Among the bestselling models, Xpeng’s Mona M03, which starts from 119,800 yuan, has been siphoning off sales of Tesla’s Model 3 priced from 235,500 yuan to 339,500 yuan.