China, the world’s largest auto market, has become the site of an intense EV price war, as manufacturers from around the world seek to court the country’s customers. Now GM is joining in the fray, and has lowered the price of the Lyriq by almost 14 percent in China.
The American automaker announced today that the all-electric Lyriq will start at 379,700 yuan ($52,505 USD at current exchange rates), 60,000 yuan ($8,296 USD) less than it did when it was launched, per GM’s media site.
Moreover, the automaker is offering an additional $2,500 discount to buyers who put a deposit down before the end of August, reports Reuters. The pricing adjustments follow a tough 2022 for the American brand.
Read: VW China’s Boss Says Discounting EVs Will Ultimately Hurt Local Consumers
Cadillac’s sales fell by nearly eight percent in last year, and the Lyriq, its first Ultium-based EV, represents a big opportunity for it, according to CFO Paul Jacobson. However, the Lyriq is competing in a tighter-than-ever Chinese market.
With competition mounting from domestic automakers, foreign manufacturers are under increasing pressure to hold onto their once dominant lead in China. Even Volkswagen, which as recently as last month said it would not engage in a pricing war, announced last week that it would cut pricing on its ID. line of electric vehicles.
Still, analysts predict that 2023 will be the first year in which domestic Chinese brands collectively outsell their foreign competition. Even as the market is expected to grow by three percent, as automakers compete for consumers, prices are falling fast.
That has led to efforts to end the price war, including an attempt from the Chinese auto association to get 16 automakers, including Tesla, to agree to avoid “abnormal pricing.” It put an end to its attempt on Saturday, recognizing that any such agreement would violate China’s antitrust laws.
While the price war threatens to cut profitability and push smaller manufacturers out of the market in China, manufacturers haven’t yet shown signs of entering into a similar battle for American consumers, and Cadillac has no plans to cut prices for the Lyriq in the U.S., where it starts at $59,000.
