Photo: Cadillac
Despite a recent deal to prevent EV prices from falling even further, the price war Tesla started in China in January continues to make victims. Days after Volkswagen announced slashing the ID.3 prices, Cadillac announced a whopping $8,300 price cut on the Lyriq.
General Motors is having problems producing its Ultium-based electric vehicles not only in the US but also in China. Despite struggling to sell EVs profitably, its luxury brand Cadillac was forced to significantly slash the prices of the Lyriq electric crossover. The move was dictated by increased competition in the Chinese market amid the recent price war started by Tesla in January. To energize sales, Cadillac lowered the Lyriq starting price by 60,000 yuan ($8,300) for all trims, representing a 14% discount.
However, this doesn't come for free as Cadillac chose to strip perks and offer them extra as a paid package. The Cadillac Lyriq used to come standard with a lifetime warranty, three years of free charging, and a free home charger. Now, these cost 60,000 yuan extra for those who want them. For all others, the Lyriq will be a lot cheaper to buy.
This is not very different from what NIO did last month when it announced lowering the starting price of all its models by 30,000 yuan. Still, the price cuts meant new EVs don't benefit from the four or six free monthly battery swaps (depending on the model). These services are now a paid package, although it's one that owners would find it harder to live without. Battery swapping was promoted as a better alternative to charging, and many are expected to pay so that, in fact, NIO doesn't lose money.
Not the same can be said about Volkswagen, which reported lackluster EV sales in China. Faced with a shrinking market share, Volkswagen decided to make the ID.3 as affordable as possible. Although its website claims this is a limited-time offer, it's hard to imagine the German carmaker raising prices again when sales are down. Following the price cut, the Volkswagen ID.3 now starts at 125,900 yuan (roughly $17,500), down more than $5,000 from the original price.
Except for Tesla, all foreign carmakers are bleeding market share in China due to very competitive models produced by domestic carmakers. The price war that Tesla started in January is also taking its toll, as all important carmakers have been forced to lower their prices. The decision has been especially painful for some of them that were nowhere near breaking even. Despite having compelling models, startups like NIO and Xpeng will find it a lot harder to make a profit.
While GM certainly affords to lose money to stay in the market, it doesn't mean the decision is painless. Cadillac launched the Lyriq in China last November at a starting price of 479,900 yuan. The electric crossover is now 20% cheaper after less than eight months on the market. This setback adds to GM's problems in the US, where the Ultium EV production doesn't seem to ramp up.
However, this doesn't come for free as Cadillac chose to strip perks and offer them extra as a paid package. The Cadillac Lyriq used to come standard with a lifetime warranty, three years of free charging, and a free home charger. Now, these cost 60,000 yuan extra for those who want them. For all others, the Lyriq will be a lot cheaper to buy.
This is not very different from what NIO did last month when it announced lowering the starting price of all its models by 30,000 yuan. Still, the price cuts meant new EVs don't benefit from the four or six free monthly battery swaps (depending on the model). These services are now a paid package, although it's one that owners would find it harder to live without. Battery swapping was promoted as a better alternative to charging, and many are expected to pay so that, in fact, NIO doesn't lose money.
Not the same can be said about Volkswagen, which reported lackluster EV sales in China. Faced with a shrinking market share, Volkswagen decided to make the ID.3 as affordable as possible. Although its website claims this is a limited-time offer, it's hard to imagine the German carmaker raising prices again when sales are down. Following the price cut, the Volkswagen ID.3 now starts at 125,900 yuan (roughly $17,500), down more than $5,000 from the original price.
Except for Tesla, all foreign carmakers are bleeding market share in China due to very competitive models produced by domestic carmakers. The price war that Tesla started in January is also taking its toll, as all important carmakers have been forced to lower their prices. The decision has been especially painful for some of them that were nowhere near breaking even. Despite having compelling models, startups like NIO and Xpeng will find it a lot harder to make a profit.
While GM certainly affords to lose money to stay in the market, it doesn't mean the decision is painless. Cadillac launched the Lyriq in China last November at a starting price of 479,900 yuan. The electric crossover is now 20% cheaper after less than eight months on the market. This setback adds to GM's problems in the US, where the Ultium EV production doesn't seem to ramp up.
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