Mercedes-Benz Group AG has been forced to offer huge discounts on electric vehicle models sold in China. They amount to up to US$33,000 for individual models – the reason for this is the increasing competition from local automakers, which is negatively affecting Mercedes-Benz’s sales in the world’s largest electric vehicle market.
As the manufacturer announced on its website on Tuesday, the company is reducing prices for certain models in the EQ series, and discounts will apply from Wednesday. In addition, grants are available to those who recently bought cars. The EQE model is known to be priced at 478,000 yuan ($67,675) in China now – it cost another 528,000 yuan ($74,625) on Tuesday. The premium EQS model is now priced at 956,000 yuan (about US$135,000) compared to 1.19 million yuan yesterday (about US$168,000) – the price down by about US$33,000.
According to Bloomberg sources, the German company has been forced to cut prices as recent sales results in China leave something to be desired. Some dealers have already run promotions to revive sales of German car products, reports say EQS model deliveries drop to 100 EVs a month from time to time.
This is an all-electric version of the flagship Mercedes-Benz S-Class with the latest technology. While the low roofline makes the car very aerodynamic and indirectly increases the range of an electric vehicle, the design leaves little room in the back seats – quite important in China’s premium car market, as wealthy buyers prefer to ride in the back seat and take up the space leave drivers under control.
Foreign brands, including older car brands, are known to be losing ground in China to local automakers, whose products accounted for nearly 80% of all electric vehicle sales in the first seven months of 2022, according to data from the China Passenger Car Association.
According to some reports, Mercedes-Benz sold 8,800 electrified vehicles in the country from January to July, including the lower-priced EQA, EQB and EQC models. At the same time, the Chinese manufacturer BYD, which specializes in mid-range electric vehicles, sold around 220,000 electric vehicles and hybrids in October alone.
Mercedes-Benz isn’t the only foreign company forced to respond to stiff competition from Chinese automakers. Elon Musk had to lower the prices for his Tesla models in October.
According to a representative of the China Passenger Car Association, local automakers have already done so “build muscle” and after bridging the technological gap in the manufacture of machines from new energy sources, they even have a clear advantage both in supply chains and in sales to end customers.