Global EV stockpile sparks new price war as Thailand faces after-sales challenges

The Star

28-05-2025

BANGKOK: The global electric vehicle (EV) industry is facing a crisis of excessive stockpiles, igniting a new round of price wars, while in Thailand, challenges persist in after-sales services despite consumer benefits from lower prices.
The Federation of Thai Industries (FTI) emphasises that the automotive market has long been competitive and urges manufacturers to have sufficient capital and to accelerate adaptation. Analysts suggest the era is shifting toward restructuring with a focus on after-sales services to build consumer confidence. The survival of brands may hinge on their parent companies' strategies.
On May 27, 2025, Chinese EV makers' stocks fell for two consecutive days following a major price cut announcement by BYD, the world's top EV seller by volume in China. BYD slashed prices on up to 22 EV and hybrid models by as much as 34 per cent over the past weekend, potentially triggering a fresh EV price war in China amid concerns across the auto industry.
Reuters and international media reported that on May 23, BYD launched a large-scale discount and incentive campaign running through June, cutting prices on 22 models, including a 34 per cent reduction on the Seal sedan and a 20 per cent cut on the Seagull model, with the cheapest Seagull electric hatchback starting at about 55,800 yuan (US$7,745).
BYD customer service officials said customers must participate in a government-backed trade-in programme encouraging consumers to exchange old products—from appliances to cars—for new ones, stimulating demand in China.
Following BYD's price war kickoff, other Chinese automakers like Geely and Leapmotor quickly announced their own discount campaigns starting May 26.
Geely Auto's Geely Galaxy brand began aggressive price cuts on Monday, offering discounts up to nearly 19 per cent on seven budget models until June 1. Other models received discounts ranging from 8 to 19 per cent. Buyers trading in vehicles receive subsidies of about 3,000 yuan from the company and up to 20,000 yuan from the government.
Leapmotor offered up to 30 per cent off the C11 SUV, reducing prices by 45,000 yuan to start at 103,800 yuan. Meanwhile, IM Motors cut prices on the LS6 electric SUV by nearly 19 per cent, starting at 194,900 yuan.
A team from Deutsche Bank, led by Wang Bin, attributes BYD's recent price cuts to rapid inventory build-up at dealerships. In the first four months of 2025, BYD's dealer stock rose by about 150,000 units, nearly matching half-month retail sales.
'Our checks with dealers show BYD's inventory level stands at approximately three to four months' supply, likely the maximum dealers can handle,' Deutsche Bank noted.
The inventory increase partly reflects BYD's ambitious target of 5.5 million unit sales in 2025, a 30 per cent increase over the previous year.
However, BYD's retail sales rose only 15 per cent year-on-year in the first four months.
Deutsche Bank analysts also highlighted that new orders for BYD's 'God's Eye' autonomous driving system have fallen short of expectations, contributing to softer retail sales.
They believe BYD's additional price cuts may fuel intensified mass-market competition, prompting rivals to follow suit.
Yel Zhang, Managing Director of consulting firm Automotive Foresight, told Forbes that BYD aims to attract price-sensitive consumers with aggressive discounts. However, he doubts whether this strategy will be fully effective in the long term.
Wei Jianjun, Chairman of Great Wall Motors, warned in a recent interview with Sina Finance that China's auto industry faces its own 'Evergrande' crisis, referring to the massive debt problems that engulfed the Chinese real estate giant China Evergrande and triggered a liquidity crisis in the sector.
The outspoken Great Wall chairman described China's EV industry as being in an unhealthy state due to heavy losses and a prolonged price war that has disrupted the supply chain.
He further explained that suppliers are struggling to survive amid ongoing pressure to reduce prices and delayed payments, while accusing some automakers of neglecting safety and reliability concerns.
Thailand's EV market showed remarkable growth in 2023, with registrations hitting 76,000 units, a huge leap from less than 10,000 units in 2022. Government incentives promoting EV use and investment have attracted many players, especially Chinese brands benefiting from the Asean-China Free Trade Agreement, allowing EV imports from China without tariffs.
However, after the record-breaking surge, 2024 saw registrations decline to about 70,100 units, an 8 per cent drop, signaling emerging challenges for the EV sector.
Industry sources said the explosive growth in 2023 led many to believe EVs would disrupt traditional automotive markets, prompting numerous brands to heavily invest and launch new models, resulting in excessive vehicle stockpiles and flawed planning.
With inventories surpassing demand, the market now faces the challenge of liquidating excess stock, including through price reductions. Many analysts expect modest growth ahead.
Saroj Ma-Ajlert, Senior Vice President of Sales and After-Sales at Mitsubishi Motors Thailand, said EV popularity remains but growth is moderate. Various brands try different marketing tactics, including auto shows like the Bangkok International Motor Show and Motor Expo, which temporarily boost sales, but overall market share has not shifted significantly.
Phongsak Lertrudeewatthanawong, Deputy Managing Director of MG Sales Thailand, said the EV market share is about 13–14 per cent. Significant growth beyond this will require factors that change market dynamics and convince hesitant customers to switch to EVs.
Phongsak emphasised that a critical negative factor slowing the EV market is after-sales service. Increasing complaints include lack of parts availability and long repair times, which harm consumer confidence. Addressing these issues and raising awareness is a key task for operators and a competitive advantage for those who succeed.
This trend marks a turning point for the EV market, requiring balanced planning of sales and parts supply—especially for components traditionally not replaced quickly, like body parts after accidents.
If after-sales challenges persist alongside market stagnation and consumer uncertainty, the EV business outlook will deteriorate further.
Although the recent large-scale price cuts in China grab headlines, they are unlikely to significantly affect Thailand's EV market. Globally, EVs—including those in China—are still priced higher than internal combustion engine (ICE) vehicles, hybrids, or plug-in hybrids. Thailand remains unique in offering EVs at prices lower than ICE vehicles.
Thailand's EV prices have stabilised following aggressive pricing during recent motor shows, which is a positive sign. However, price competition may still emerge as part of normal business dynamics and brand strategies, considering broader market conditions beyond any single country.
Comparing Thailand's market with that of parent companies in China reveals vast differences in production and sales volumes. Parent companies may not prioritise profitability heavily, meaning the Thai market—relatively small—may be less impacted by Chinese price wars.
However, if parent companies falter, this signals trouble for subsidiaries globally, including in Thailand.
Surapong Paisitpattanapong, Advisor to the Automotive Industry Group and Spokesperson of the Automotive Industry Group at the Federation of Thai Industries (FTI), said that the ongoing intense EV price war in China is driven by a crowded market and fierce competition for market share.
Oversupply has pushed leading makers like BYD to cut prices, increasing pressure on rivals including Tesla, which launched China's EV price war in 2023.
Thailand's EV production has also supported Chinese brands' growth, whether or not prices are cut, because Thai consumers value model design, brand, and technology. Thai manufacturers have produced under the government's EV3.0 policy, including exports.
BYD, for example, produced 660 units domestically in April 2025 as part of production offset requirements, with more production expected through 2027 under EV3.5 import and production schemes.
In this fierce competition, manufacturers must have long-term financial endurance and adjust investments to remain competitive. Competition is natural, as ICE vehicles have faced intense competition for decades, he said.
Ultimately, success depends on winning consumer preference, especially through excellent after-sales service, parts availability, skilled technicians, and customer support, Surapong concluded. - The Nation/ANN