In an article published today, Cui Dongshu, Secretary-General of the China Passenger Car Association, observed that prices for traditional fuel vehicles have been on an upward trajectory, with a particularly pronounced contraction in the mid-to-low-end market segment. In contrast, the high-end market has witnessed a relatively more gradual decline. The average price of fuel vehicles has climbed from RMB 166,000 in 2021 to RMB 188,000 in 2024. It is anticipated that by 2025, as the high-end fuel vehicle market contracts at an accelerated pace, the average price will dip to RMB 182,000, and further decline slightly to RMB 181,000 by March 2026, at which point the purchasing demographic for fuel vehicles is expected to stabilize.
Currently, China's car ownership rate stands at merely 254 vehicles per 1,000 people, indicating that the popularization of car consumption remains a prominent trend for the foreseeable future. The cost reductions brought about by electrification are poised to drive continuous decreases in vehicle prices. However, with adjustments to the vehicle purchase tax exemption policy and upgrades to the technical criteria for new energy vehicle tax exemptions, certain models with short driving ranges and high power consumption are encountering challenges in terms of model updates.
In March, the A00-class electric vehicle market experienced a sharp contraction, which in turn led to an increase in average prices. Consequently, significant pressure is expected to be placed on sales growth in 2026.