Carmakers must halt price war to tackle new demands, say analysts

Carmakers must shift from price cutting to meeting emerging family-oriented demand while addressing critical chip bottlenecks, as China's new energy vehicle industry enters a new phase of scale and competition, analysts said.

They highlighted the changing dynamics of the world's largest auto market at the China Intelligent Electric Vehicle Industry Chain Top 100 Forum in Hefei, Anhui province.

The event, organized by Diancheren Industrial Platform, XYuan Capital and GUiTEK Service Platform, drew around 200 executives from automakers, component suppliers, investment institutions and local governments.

Zhou Lijun, head of the TengYi Research Institute, said Chinese car buyers still have purchasing power but remain cautious as households face rising pressures from children's education, elder care and job uncertainty.

He argued that the key to breaking the current industry "involution" is shifting from a price war to a demand war.

China's next wave of mainstream growth, he said, will be driven by family-centric scenarios such as parent-child travel and long-distance road trips.

Automakers that invested early in these segments "are already escaping the vicious cycle of discounts", Zhou said.

The forum also spotlighted progress and challenges in autonomous driving.

Zhu Xichan, a professor at Tongji University, said today's Level 2+ systems remain fundamentally driver-assist features despite their technical sophistication.

Safety gaps persist, he said, due to "long-tail scenarios" in perception and complex-scene handling.

He urged companies to expand scenario libraries and incorporate large-model architectures such as vision-language-action frameworks to support the shift toward mass-market L3 deployment.

One of the event's key releases was the 2025 China Top 100 Smart EV Core Components Report, an annual industry benchmark published for the 10th consecutive year.

The ranking evaluates companies by scale, customer quality, growth trajectory, segment leadership and capital strength.

This year's list includes major suppliers such as CATL, BYD's FinDreams Battery, SHedrive, Ecarx and Desay SV, offering a snapshot of competitive dynamics across China's fast-evolving smart electric vehicle supply chain.

Supply-chain security — particularly in automotive chips — remained a central concern.

Gong Jun, general manager of Shanghai Intelligent Automotive Integration Innovation Center, said China's auto-grade chip sector faces the structural challenge of being "weak in the middle and strong at both ends".

While basic upstream components and downstream application ecosystems have grown, high-end chip design, advanced manufacturing and key equipment remain heavily dependent on imports, which stand at around 80 percent of the market share.

He called for accelerated development of national innovation centers, coordinated research and development efforts, improved standards and testing systems and policy tools to build an independent and reliable chip system.

The forum also featured global perspectives, as China has seen its vehicle exports increase steadily in recent years.

Statistics from the China Passenger Car Association show that 6.46 million vehicles were shipped overseas in the first 10 months of this year, up 22 percent compared with the same period of 2024. Of these, 2.65 million were NEVs, a 54 percent surge from a year earlier.

Chen Chaozhuo, an overseas strategy adviser, shared findings from his 18-month field study across multiple markets.

He said China's true edge lies in its "complete and highly competitive supply chain", arguing that building supply-chain capacity overseas will be essential for successful vehicle exports.

Capital, he added, "must go abroad along with the supply chain".