China’s NEV price war to continue in H2 amid fierce competition, automakers’ profitability still under pressure – JPMorgan

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China recently announced extension of purchase tax exemption and cut for new energy vehicles (NEVs) from 2024 to 2027, which will drive NEV demand and bode well for the long-term growth of the industry, JPMorgan said, adding that NEV penetration will deepen.

The price war will continue in the second half of the year as market competition remains fierce in the short term and that will still exert pressure on the profitability and share price performance of automakers, the bank said.

The stimulus measures are expected to accelerate transition from traditional ICE to NEV, and that PHEV will sustain solid growth in the next few years, among which BYD Company will retain a leading position, with a rating of Buy, it said.