The Chinese electric vehicle market has encountered a new problem that was hardly discussed until recently. While manufacturers compete in range, charging, and artificial intelligence, owners are increasingly losing money due to the rapid depreciation of cars in the secondary market.

Xpeng G9
Xpeng G9
Источник изображения: Xpeng

According to Chinese analysts, many electric vehicles lose value significantly faster than ICE vehicles. The main reason is price wars between manufacturers. Over the past two years, dozens of brands have regularly lowered prices for new models, effectively devaluing already sold cars.

The speed of technological updates creates additional pressure. New batteries, more powerful chips, and improved intelligent driving systems appear so quickly that cars two or three years old begin to be perceived as outdated much earlier than was the case in the era of traditional cars.

This is especially noticeable against the backdrop of aggressive competition between BYD, Xiaomi, Nio, Xpeng, and dozens of other players. Each new launch is accompanied by improved characteristics and often a lower price compared to previous generations.

The problem extends far beyond the secondary market. Residual value directly affects leasing, lending, and corporate fleets. If a car depreciates too quickly, it becomes more difficult for banks and leasing companies to predict risks, and monthly payments for customers increase.

For the Chinese automotive industry, this is a particularly sensitive issue right now. Many brands are already operating with minimal margins or even at a loss to increase market share. But if buyers start to factor in future losses from resale, price competition could hurt manufacturers themselves.

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