Explosion in Electric Vehicle Inventory Triggers Pricing Dispute as Thailand Encounter Issues with Post-Sale Services
Global Electric Vehicle Industry Faces Crisis Amid Excess Stockpiles and Competitive Price Wars
The electric vehicle (EV) industry is grappling with a crisis of surplus inventory, triggering a new round of price wars, particularly in China, while Thailand continues to encounter challenges in after-sales services despite lower prices offering consumer benefits.
The Federation of Thai Industries (FTI) acknowledges the competitive nature of the automotive market, urging manufacturers to bolster their financial resources and accelerate adaptation. Market analysts predict a shift in the era towards restructuring, with greater emphasis on after-sales services to bolster consumer confidence. The survival of brands may hinge on the strategies of their parent companies.
On May 27, 2025, Chinese electric vehicle (EV) manufacturers' stocks plummeted for consecutive days following a significant 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% over the weekend, potentially sparking a fresh EV price war in China, raising concern throughout the auto industry.
By the 23rd of May, BYD launched a large-scale discount and incentive campaign in conjunction with a trade-in program, encouraging consumers to exchange old products-from appliances to cars for new ones-stimulating demand in China.
In response to BYD's price war, other Chinese automakers like Geely and Leapmotor swiftly announced their own discount campaigns starting May 26.
Geely and Leapmotor Join the Price War
Geely Auto's Geely Galaxy brand initiated aggressive price cuts on May 27, offering discounts of nearly 19% on seven budget models until June 1. Other models received discounts ranging from 8% to 19%. Customers trading in vehicles also receive subsidies of about 3,000 yuan from the company and up to 20,000 yuan from the government.
Leapmotor offered up to 30% off the C11 SUV, reducing prices by 45,000 yuan, starting at 103,800 yuan. Meanwhile, IM Motors cut prices on the LS6 electric SUV by nearly 19%, starting at 194,900 yuan.
Abundant Inventory Prompts BYD's Price Cuts
Analysts attribute BYD's recent price cuts to rapid inventory build-up at dealerships. In the first four months of 2025, BYD's dealer stock increased by about 150,000 units, nearly equal to half-month retail sales. This inventory increase partly reflects BYD's ambitious target of 5.5 million unit sales in 2025, a 30% increase over the previous year. However, BYD's retail sales rose only 15% year-on-year in the first four months. New orders for BYD's "God's Eye" autonomous driving system have also fallen short of expectations, exacerbating retail sales softness.
Price Wars Risk Intensified Competition
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, but questions the long-term effectiveness of this strategy.
Wei Jianjun, Chairman of Great Wall Motors, has warned about the risks in China's EV industry. He described the market as being in an unhealthy state due to heavy losses and a prolonged price war that has disrupted the supply chain.
Thailand's EV Market Grows but Faces Challenges
Thailand's EV market registered remarkable growth in 2023, with registrations hitting 76,000 units, surging from less than 10,000 units in 2022. The government's incentives promoting EV use and investment have attracted many players. However, after an initial surge, 2024 registrations declined to about 70,100 units, a 8% drop, indicative of emerging challenges for the EV sector.
Industry sources attribute this drop to miscalculated supply planning and excessive vehicle stockpiles resulting from the market's explosive growth in 2023. As inventories surpass demand, the market now faces the challenge of liquidating excess stock, with modest growth anticipated in the future.
Focus on After-Sales Service
Phongsak, Deputy Managing Director of MG Sales Thailand, acknowledged that the critical negative factor slowing the EV market is after-sales service. Increasing complaints include lack of parts availability and prolonged repair times, which perpetuate consumer mistrust. Addressing these issues and raising awareness is a key task for operators, and a competitive advantage for those who succeed.
Limited Impact of China's Price War on Thailand
Despite China's large-scale price cuts grabbing headlines, Thailand's EV market is unlikely to be significantly affected. EVs, even 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 stabilized 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 prioritize profitability heavily, meaning the Thai market-relatively small-may be less impacted by Chinese price wars. However, if parent companies falter, this signifies potential trouble for subsidiaries globally, including in Thailand.
FTI Highlights After-Sales Service as a Strength
FTI emphasized that the ongoing intense EV price war in China is driven by a crowded market and aggressive competition for market share. Thai EV production supports Chinese brands' growth, whether or not prices are cut, because Thai consumers value model design, brand, and technology.
Ultimately, success depends on winning consumer preference, particularly through excellent after-sales service, parts availability, skilled technicians, and customer support, FTI concluded.
- The global business landscape is witnessing a wave of restructuring in the automotive sector, particularly in the electric vehicle (EV) industry, with a shift towards prioritizing after-sales services to bolster consumer confidence.
- Healthy competition in the EV market, marked by price wars, has intensified recently, as seen in China, where BYD's price cuts have prompted rivals like Geely, Leapmotor, and others to follow suit.
- The expansion of the EV market in Thailand has been remarkable, with registration figures surging in 2023, but facing challenges in 2024 due to miscalculated supply planning and excessive vehicle stockpiles.
- After-sales service remains a critical factor for EV market growth, with significant issues such as parts availability and prolonged repair times leading to consumer mistrust in Thailand and other markets.
- International finance and investing are closely watching the EV industry, as the crisis of surplus inventory and price wars could lead to heavy losses and disrupt supply chains, as warned by Wei Jianjun, Chairman of Great Wall Motors.
- The EV market in Thailand appears less vulnerable to the price wars in China, as EV prices remain lower than those in China, and after-sales service remains a key competitive advantage for Thai operators.
- Despite the ongoing EV price war in China, the Federation of Thai Industries (FTI) highlights the importance of after-sales service in winning consumer preference, ensuring profitability, and ultimately, the survival of EV brands in the global market.
