Two electric vehicle (EV) models targeting middle-income consumers in mainland China with lower prices have emerged as Tesla’s strongest rivals, as buyers become more budget-conscious.
Galaxy from Geely Auto and Xpeng’s Mona 03, which are priced at about 150,000 yuan (US$20,580), threaten to disrupt the pecking order in China’s EV sector.
“Young, middle-income consumers favour electric cars with smart features like autonomous driving systems and voice-activated control technology, but they normally choose the cheapest models due to concerns about the economic outlook and their own job prospects,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “Cars [like] Galaxy and Mona are deemed value-for-money vehicles with performance on par with some premium models.”
The Mona 03, a midsize, fully electric sedan priced at 119,800 yuan to 159,800 yuan – which hit the mainland market in August – reported deliveries of more than 15,000 units in January.
The entire mainland EV market reported sales of about 900,000 units in January, up 31 per cent from a year earlier, according to the China Passenger Car Association (CPCA).
The Mona 03, equipped with an advanced driving-assistance system, has a range of at least 515km. It is seen by many young drivers as an equal to Tesla’s Shanghai-made Model 3, which has a price tag of 227,500 yuan for its basic edition.
“It saves a buyer half of the cost if he chooses to own a Mona 03 rather than a Model 3 while the two cars are nearly tied in terms of size, driving range and [intelligence level],” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “We see a trend that customers opt for the cheapest brand and model since they are worried about job security and potential pay cuts [because] they expect economic turbulence ahead.”
The Galaxy, Geely’s mass-market EV brand, sold 93,545 units last month, up 130 per cent from a year earlier.
Galaxy sedans and sport-utility vehicles (SUVs) are priced at about 150,000 yuan and they lured thousands of buyers away from Tesla’s Model 3 and Model Y vehicles last month, Tian said.
In a research note, China International Capital Corporation said Galaxy’s rising popularity on the mainland would boost its share price by 5 per cent. On Friday, Geely Auto’s Hong Kong-listed shares jumped 8 per cent to HK$17.72.
Earlier this week, Tesla said buyers of its mainland-made Model 3 cars would receive an 8,000 yuan subsidy for vehicle insurance, firing the first shot in the Year of the Snake to gain an upper hand over local players like Xpeng and BYD.
It also offered a five-year, interest-free loan to eligible customers, which amounted to 20,000 yuan in savings. Tesla has yet to offer incentives for buyers of its Model Y SUV, which starts at 263,500 yuan.
China is the world’s largest automotive market and its sales of pure electric and plug-in hybrids account for about 60 per cent of the global total. Nationwide, the EV penetration rate surpassed 50 per cent in July.
At present, BYD dominates the mainland’s mass market while Tesla is the front-runner in the premium segment.
Steep discounts by car manufacturers have persisted for the past two years, despite calls by industry leaders to curb price competition. Producers cut prices on 195 models – including petrol-powered, pure electric and hybrids – from January to November last year, up from 150 models in 2023, the CPCA said.
