China Ends EV Price Wars, which Means Higher U.S. Car Prices

China’s long-running electric vehicle price wars have officially come to an end, and U.S. buyers will likely never experience the kind of rock-bottom pricing they produced, Simran Rastogi reported for Autoblog.

Companies like BYD built complete supply chains, allowing rapid innovation, with Chinese firms developing new models in roughly half the time of legacy automakers. (Photo: BYD Global Facebook)

China’s State Administration for Market Regulation (SAMR) decided to bar all vehicle manufacturers from selling cars below manufacturing cost. This ends the brutal domestic competition that is projected to have cost the automotive industry $68 billion.

The move will likely provide stability to China’s auto industry.

However, it could also affect global EV pricing. It comes at a time when other countries are deciding how to prevent ultra-cheap Chinese-made EVs from disrupting their domestic markets.

Chinese automakers achieved their price advantage through multiple factors beyond government subsidies.

They benefit from economies of scale in the world’s largest EV market, where electric vehicles now represent more than 50% of new car sales. Manufacturers also leveraged extended payment cycles to suppliers and strategic vertical integration of battery production.

Companies like BYD built complete supply chains, allowing rapid innovation, with Chinese firms developing new models in roughly half the time of legacy automakers.

The price-war ban targets manufacturers that were using artificially low prices to eliminate competition and gain market control.

Several manufacturers were pushed to the brink of bankruptcy or disappeared altogether during the price wars, while many auto parts suppliers waited as long as 300 days for payment.