Competition in China's electric vehicle (EV) market has been ratcheted up a notch when premium automobile manufacturer Aito, sponsored by telecommunications equipment giant Huawei, cut down the prices of its M5 and M7 models.
This follows only one week after Tesla announced huge reductions in the world's biggest automotive market.
Latest Move
Aito was collaboratively launched in December 2021 by Huawei and EV producer Seres.
In a report by South China Morning Post (SCMP), it has reduced the price of three M5 and M7 models by as much as 30,000 yuan ($4,444). This brings the new costs down to between 289,800 yuan and 309,800 yuan, according to a statement made on Friday, Jan. 13.
The basic M5 model was dropped in price by 28,800 yuan, now costing 259,800 yuan. With a starting price of 259,800 yuan, the standard M5 model is 100 yuan less than Tesla's Model Y Long Range electric SUV.
China's EV Market
A previous protest at a Shanghai delivery center was sparked by Tesla's unexpected price drops over the weekend, with customers demanding refunds from the US automaker for failing to provide early notice of the markdowns.
As a result of layoffs in China's technology sector, interruptions in production, and the pandemic's effects on the economy, budget-conscious buyers have opted for cheaper EV models. This is, no doubt, shown by the significant price modifications made by Aito following Tesla's recent offers.
Even though China is still seven years away from the day when three out of every five new cars sold are totally electric, the EV industry in China is projected to lose momentum in 2023.
China's EV industry is very competitive, and Aito, which began deliveries in March 2022, has a lot of rivals.
More than 200 businesses have spent tens of billions of dollars researching, designing, and constructing EVs in the world's second-largest economy thanks to Beijing's effort to increase EV adoption countrywide.
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Financial Backers
Last year, Aito released two models, and Huawei assisted in selling them via its brick-and-mortar shops located around China. Seres, a Santa Clara, California-based automaker, is owned by Chongqing Sokon Industry Group, which is listed on the Shanghai Stock Exchange.
Aito reported 76,180 EV sales at the end of last year. According to data, it came in at number six among Chinese EV startups in terms of sales. Neta of Hozon Auto, Li Auto of Beijing, and Nio of Shanghai headed up the list.
After being banned by the US government in 2019, Huawei is attempting to diversify its income streams by entering the EV sector in Shenzhen. Since Huawei had used up all of its sophisticated in-house built processors, the tightening of 2020 trade restrictions had a devastating effect on the company's once-profitable smartphone industry.
