China's EV Market Faces Intense Competition as 110 New Models Set to Launch in 2024

China's electric vehicle (EV) market is experiencing intense competition as 110 new models are set to launch in 2024. This surge in new models is driving down prices and spurring innovation from companies like Hesai and Launch Design, who are accelerating their development efforts to reshape the industry dynamics.

The increased competition and new model launches are expected to further drive growth and adoption of EVs in the Chinese market. China's EV market is already the world's largest, with almost 400 new energy models in showrooms, far exceeding the just over 50 EV models on sale in the United States last year.

The intense competition has led to a price war, with Tesla, Li Auto, and other automakers making significant price cuts on over 40 EV models in recent months. Analysts say the price war is just beginning, as the flood of new models in 2024 is expected to further drive down prices.

While the increased competition poses risks of overcapacity, it has also unleashed a "technological revolution" in China's EV industry. Chinese EV makers are at the forefront, able to slash vehicle development time to 18 months and offer new features and pricing advantages. Suppliers like Hesai, a leading lidar sensor manufacturer, are accelerating the development of advanced EV technologies to meet the growing demand.

Why this matters: The intense competition and rapid innovation in China's EV market is reshaping the global automotive industry. As Chinese EV makers continue to drive down costs and introduce new models at an unprecedented pace, they are positioning themselves to dominate not only the domestic market but also expand globally, potentially challenging established automakers in other regions.

However, the current situation is seen as "unhealthy" by some industry players. "We have too many EV makers. The market is getting crowded and not everyone will survive," said Stephan Wöllenstein, Volkswagen's China chief, calling the price war unsustainable. Despite these concerns, the competition is expected to continue driving EV adoption in China, with the market share of EVs and plug-in hybrids already overtaking traditional vehicles in retail sales.

Key Takeaways

• China's EV market to see 110 new models launch in 2024, driving price competition.
• China's EV market is the world's largest, with almost 400 new energy models in showrooms.
• Price war among Tesla, Li Auto, and others, expected to further intensify in 2024.
• Competition spurs technological revolution, with suppliers like Hesai accelerating EV tech development.
• China's EV makers poised to dominate domestic and global markets, challenging established automakers.