As a new car manufacturing company encountered difficulties at year's end, the automotive industry landscape abruptly tightened, sparking concerns among medium-sized automakers with lower sales about potentially becoming the next casualty. To stay afloat, these companies are likely to engage in even more intense price wars, as history has shown price wars to be the most effective strategy for automakers to gain market share.

The price war actually commenced earlier this year, spearheaded by a prominent automaker that boldly slashed new energy vehicle prices by 40,000 to 70,000 yuan. This aggressive move not only shook up the new energy vehicle industry but also dealt a blow to traditional fuel vehicle companies.

Overall automotive market data reveals that new energy vehicles now account for over 50% of the new car market, nearing 60%. Under the onslaught of new energy vehicle companies, the share of fuel vehicles has declined, and the proportion of foreign vehicles, which primarily promote fuel vehicles, has also dipped below 30%. This underscores that price reductions in new energy vehicles have indeed gained significant consumer favor.

The intense price war has also caused traditional domestic automakers to frown, with some accusing the fierce competition of causing industry losses, disrupting the automotive industry's virtuous cycle, and jeopardizing China's automotive industry's long-term development. The ferocity of this year's price war is evident.

The automaker that initiated the price war has reaped substantial rewards. Data indicates that sales of new energy vehicles in the Chinese market surged year-on-year in the first nine months of this year, reaching 8.32 million vehicles. This automaker's new energy vehicle sales approached 2.8 million, accounting for nearly 30% of the new energy vehicle market—a share unmatched even by foreign car companies that once dominated the domestic market.

Despite the robust growth momentum of new energy vehicles, at least two new car manufacturers suddenly faced difficulties towards the end of the year. This is because the new energy vehicle market, after nearly a decade of development, has reached a harvesting stage.

The leading new energy vehicle company that initiated price cuts is undoubtedly one of the beneficiaries of this harvest. It holds a commanding position in the new energy vehicle market, and currently, its market dominance appears unshakable.

Tesla is another company reaping the rewards of the Chinese new energy vehicle market, though it primarily targets the above-200,000-yuan segment. Recent weeks' data shows Tesla's sales in the Chinese market have been consistently rising. Data for the 49th week revealed that Tesla's sales exceeded 20,000 vehicles, making it the only automaker in the luxury car market with weekly sales topping 20,000 units.

Traditional automakers are also benefiting from the new energy vehicle market. Changan, Geely, and Chery have witnessed rapid growth in new energy vehicle sales. Changan's new energy vehicle sales surpassed 100,000, making it the second automaker to achieve monthly sales of over 100,000 new energy vehicles, while Geely's monthly sales reached 91,000.

The surge in new energy vehicle sales for these automakers is due to the automotive industry's emphasis on scale. Only with sufficient scale can one sustain costly manufacturing plants and after-sales service systems.

In contrast, among new car manufacturers, only one has surpassed the monthly sales threshold of 50,000 vehicles, while the other two have exceeded 40,000 and 30,000 vehicles, respectively. Many others have monthly sales of less than 5,000 vehicles. As two new car manufacturers recently encountered difficulties, consumers are likely to shy away from smaller automakers, further reducing their sales.

Faced with this scenario, two new car manufacturing companies that have recently witnessed a sales surge have successfully broken through by positioning their vehicles in the 100,000-yuan price range. These are also the aforementioned automakers that have surpassed monthly sales thresholds of 40,000 and 30,000 vehicles. Their success will encourage those with insufficient sales volumes to intensify price wars to gain survival opportunities, prompting fuel vehicle and other dominant new energy vehicle companies to join in.

It is anticipated that 2025 will witness an even more intense price war, weeding out companies unable to adapt through price competition. The new energy vehicle industry will evolve into a scenario where the strong grow stronger, while the rest either go bankrupt or get acquired—their inevitable fate.