Inside China’s Explosive EV Price War: Leaders Trade Blows as Profit Margins Collapse at 2025 Chongqing Forum
Major Chinese automakers clash at the 2025 Chongqing Forum as brutal price cuts push the EV industry to a critical breaking point.
- Profit Margins Plunge: Down to 3.9% in Q1 2025 from nearly 9% in 2014
- 200+ Models Discounted: Over 100 EV models saw price cuts in May 2025 alone
- 40% EV Market Penetration: China now leads the world in electric vehicle adoption
- Tesla Sales Crash: Down 36% year-on-year in Europe Q1 2025
Tensions at this year’s 2025 Chongqing Auto Forum reached new heights as China’s electric vehicle giants BYD, Geely, and Great Wall Motor (GWM) clashed publicly, exposing bitter feuds behind the world’s largest—and most cutthroat—EV market.
Gone are the days of united fronts. What once was a chorus for national industry growth now cracks under the stress of a market bloodbath. Brutal price wars sizzling through 2025 have obliterated once-safe profit margins, forcing carmakers into open conflict and leveling the playing field with fierce, sometimes personal attacks.
Why Did BYD and Geely’s War of Words Erupt?
The spark came when BYD’s Li Yunfei lashed out against competitors for waging “smear campaigns” and manipulating public opinion, a pointed departure from previous calls for unity. Geely’s Victor Young fired back, labeling BYD’s stance as deceptive and urging strict regulatory intervention rather than emotional appeals. Meanwhile, GWM and others warned that unchecked rivalries could trigger an industry crisis akin to a ticking time bomb.
How Fierce Has China’s EV Price War Become?
China’s EV sector is locked in a race to the bottom. According to the China Council for the Promotion of International Trade, more than 200 car models saw their prices slashed in 2023. This brutal trend accelerated in 2025: more than 60 fresh cuts in just four months, peaking with discounts on over 100 models during May.
Profit margins have all but evaporated—shrinking to just 3.9% in Q1 2025, a stark contrast to the nearly 9% margins seen a decade ago. Industry watchers note that raw sales no longer equate to real profits. The Chinese EV market is growing in volume but bleeding financially.
What’s Driving This Ruthless Competition?
The root cause? Scale and high expectations. With EV penetration exceeding 40%, the sector is bumping up against growth limits—while state support and high sales volumes no longer guarantee financial health.
Innovation isn’t optional. Companies scramble to pour money into technologies like autonomous driving and solid-state batteries, even as they cut prices in a desperate bid for market share. Respected industry figures, including those from Geely and BYD, warn openly: the current competitive tactics could spark a full-blown crisis.
What Does This Mean for Global Players—Like Tesla?
China’s chaos echoes worldwide. Even Tesla, a historic EV juggernaut, saw its Q1 2025 European sales nosedive 36%. With the price war spreading beyond China, established brands everywhere face collapsing profit structures and unsustainable competition.
As price cuts accelerate, industry bodies such as the China Association of Automobile Manufacturers have condemned predatory pricing, urging law-based interventions to restore order. The China Automobile Dealers Chamber of Commerce has echoed these warnings, demanding carmakers stop overburdening dealers with unrealistic sales goals—signaling the end of business as usual.
How Can Carmakers Survive the Storm?
Insiders say the answer lies in focusing on core technological strength, transparent competition, and stronger regulatory frameworks. Chery’s leaders advocate for fair rivalry and warn that only companies with true innovation and operational health will survive long-term.
Players must now balance sharp pricing with relentless investment in future tech—all while hoping regulators clamp down on destructive tactics. The market’s “grow-at-all-costs” era is over: survival means mastering both innovation and ethics.
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Your Next Steps: Stay Ahead in China’s EV Revolution
Now’s the time to stay informed as China’s EV industry enters its most defining phase yet.
- Follow regular updates from industry groups like CAAM
- Track financial health, not just flashy sales numbers, when evaluating automakers
- Watch for regulatory changes tightening price competition and sales tactics
- Look for leaders investing in innovation—those will be the survivors
Stay tuned and stay smart: the real winners in the global EV arms race have yet to be crowned.
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