How will the automotive market evolve by 2025? Both the industry and automakers have offered some projections: the competition will be more intense than ever.

This is evident in BYD's proactive preparations for a potential price war in 2025. BYD sent an email urging its entire supply chain to collaborate on cost reduction efforts, with some suppliers required to decrease prices by 10% from January 1, 2025. Although this is not mandatory, suppliers have limited options if they wish to continue receiving orders from BYD.

BYD's strategy aims to create more room for price reductions, signaling its intent to continue pursuing a price war to compete for market share in 2025. Other automakers must be prepared to follow suit if they wish to compete with BYD.

Other automakers, such as Geely and SAIC Volkswagen, are also gearing up for next year's price war. Geely Auto's newly launched Xingjian 7 EM-i model boasts a limited-time starting price of just 99,800 yuan, equipped with the global new-generation Leishen EM-i super hybrid system and advanced features like a "14.6-inch central control screen, 10.2-inch full LCD instrument cluster, and 13.8-inch W-HUD head-up display".

Over 20 automakers, including SAIC Volkswagen and FAW-Toyota, officially announced price reductions at the end of this year, utilizing strategies like "limited-time pricing" and "fixed price" to secure early orders for next year.

This aligns with previous predictions from experts. Gong Min, Head of China's Auto Industry Research at UBS Investment Bank, forecast in November that as policy incentives wane, a new round of "price wars" among automakers could emerge as early as January 2025, sooner than this year.

Automakers like NIO and Leapmotor have also shared their insights into the anticipated competition in 2025.

In November, Li Bin, the founder of NIO, issued an internal letter stating that the company is currently in the most intense phase of the qualification race for the smart electric vehicle industry, with only a few companies expected to survive in the next two to three years. "Next, we will face higher-dimensional competition. We cannot afford weaknesses and must strive for swift victories."

Li Bin emphasized that the next two years will be pivotal. NIO must continuously launch competitive new products and enhance operational efficiency. "Doubling sales next year and achieving corporate profitability by 2026 are non-negotiable tasks."

On December 24, Zhu Jiangming, the founder of Leapmotor, similarly emphasized in an internal letter to employees, "We are still far from success!" He noted that the next three years are crucial, as Leapmotor has entered the finals, with competitors now ranging from new forces to mainstream brands. "The market environment remains volatile, and we need stronger capabilities and a more agile response to truly achieve our goals."

Earlier this year, He Xiaopeng, the founder of XPeng Motors, also mentioned that "the automotive industry will be the most competitive in the next three years."

It is evident that all parties agree that the next two to three years will be critical in determining the winners in China's auto market, a battle that will shape the survival of automakers. With this awareness, it is understandable why automakers are competing fiercely and vigorously.

Image source: NIO