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Passenger car prices in China experienced a sharper decline in January compared to the national average for last year, following the government’s decision to halve the purchase tax exemption for new energy vehicles (NEVs), according to recent industry data.
In January, the average discount per vehicle was approximately 37,000 yuan (around $5,330), and the typical price for discounted models was about 248,000 yuan (roughly $35,820), as reported by the secretary-general of the China Passenger Car Association on the organization’s official WeChat account.
Both electric vehicles (EVs) and traditional internal combustion engine (ICE) cars saw significant price drops. The average price of discounted NEV models was around 253,000 yuan, representing an average reduction of 38,000 yuan, equivalent to approximately 14.8%. Meanwhile, discounted ICE vehicles averaged 238,000 yuan, with a decrease of about 36,000 yuan, or 15%.
These price cuts in January exceeded the typical 10.5% discount observed across the entire previous year. The recent reductions cover a broad spectrum of car models and are especially concentrated in higher-end vehicles, highlighting a notable shift in pricing strategies within China’s premium auto sector.
Starting January 1, the government reduced the NEV purchase tax exemption from 10% to 5%, capping the maximum exemption at 15,000 yuan.
Last month, BMW’s i3 electric model experienced the most notable price reduction among NEVs, with the base price dropping to 278,000 yuan—a decrease of 75,900 yuan, or 21.4%. The largest percentage decline was seen with BMW’s X1 electric model, cut by 24%, or 71,900 yuan.
Among traditional ICE vehicles, the BMW 3 Series saw the largest markdown, with its guide price lowered to 258,000 yuan—a reduction of 50,000 yuan, or 19.3%. The most significant percentage decrease in the ICE segment was for the Dongfeng Honda HR-V, which saw its price drop by 31.3%, amounting to 75,900 yuan from its previous minimum guide price.
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