In December 2025, NEVs’ average reduction widened to RMB 20,000 ($2,780), pushing the discount rate to a relatively high 14.7%. On January 8, Cui Dongshu, secretary general of the China Passenger Car Association, released an analysis of price cuts and promotional activity in the passenger car market for December 2025. Data show that from January to December 2025, the average price reduction for new passenger vehicles in China was about RMB 20,000 ($2,780), representing an overall decline of 10.5%. In December alone, the average price cut reached RMB 15,000 ($2,080), equivalent to a 12.4% reduction. Compared with the broader market, price adjustments for NEVs were more pronounced. In 2025, the average price cut for NEVs reached RMB 21,000 ($2,920), or 11%. Average price reductions for new passenger vehicles in China from 2020 to December 2025 In December, the average reduction widened to RMB 20,000 ($2,780), pushing the discount rate to a relatively high 14.7%. By contrast, price movements for conventional ICE vehicles were more restrained. Fuel-powered vehicles recorded an average price cut of RMB 16,000 ($2,220) for the full year, a decline of 8.9%. In December, the average monthly reduction was just RMB 6,000 ($830), or around 6%. In terms of model coverage, a total of 177 vehicle models saw price cuts between January and December 2025, down by 42 models YoY. BEVs remained the largest segment by number of discounted models, with 73 models involved, though this was still five fewer than a year earlier. New vehicle price adjustments for different vehicle types in 2020, 2021, 2022, and 2025 Overall, promotional intensity eased significantly in 2025. From April to October in particular, the number of models participating in price cuts fell sharply, reflecting a more cautious approach to incentives across the market. Only four models cut prices in December, down from 19 in November and broadly in line with the three recorded in December last year, indicating relative stability toward the year-end. Cui noted that promotional pressure in 2025 was relatively limited for conventional fuel vehicles and hybrids, while competition among NEVs remained more intense. PHEVs showed greater volatility in promotions, with December incentives up 3.9 percentage points YoY but slightly lower MoM. EREVs recorded an increase of around 4.5 percentage points YoY in promotional intensity. BEVs saw incentives rise by about 1.1 percentage points YoY and edge higher MoM, suggesting continued price pressure. Monthly percentages for new vehicle segments in 2020-2025 In December, overall promotional intensity for NEVs rebounded to a mid-to-high level of 10.1%, roughly 3 percentage points higher than a year earlier. FAW Toyota’s bZ3 BEV recorded the steepest price cut of the month, with its lowest official guide price reduced from RMB 169,800 ($23,600) to RMB 109,800 ($15,250), a drop of 35%. At the retail level, dealer strategies in December focused on stabilizing incentives while protecting margins. European brands offered relatively stronger promotions, while other joint-venture brands maintained average discount levels of around 25%. Domestic Chinese brands remained the most restrained in terms of price cuts. Passenger car sales and promotional discounts across different countries from 2017 to 2025 On the policy front, the national vehicle trade-in program continued to support demand, helping lift sales and noticeably easing aggressive price competition. Industry operating pressure showed signs of improvement. From January to November 2025, the automotive industry’s profit margin recovered to 4.4%. Although still at a relatively low level, the combination of higher volumes and more stable promotions marked an improvement in operating conditions. Overall, the passenger car market remained in an adjustment phase in 2025, but the period of relying on steep price cuts to drive sales is gradually cooling.
+30 others
