Author: Xu Shanshan, Editor: Li Motian
In the first eight months of this year, seven of the top ten best-selling cars priced above CNY 500,000 in China were domestic models [1]: Zeekr 9X, AITO M9, Voyah Dreamer, Denza D9, NIO ES9, Luxeed V9, and Zeekr 8X.
In the ICE (Internal Combustion Engine) vehicle camp, only three veteran "internet celebrities" remain: Mercedes-Benz E-Class, Audi A6L, and BMW X5.
However, the selection criteria for Yiche's rankings are relatively broad, including any model with an MSRP touching CNY 500,000, with little consideration for dealer discounts and configurations. Using narrower criteria, we compiled two lists and reached a similar conclusion: domestic luxury NEVs are selling increasingly well.
In the TOP 10 best-selling car list, the proportion of domestic brands has increased significantly, reaching 79% from June to August this year. Among them, AITO M9 sold 30,257 units, NIO ES9 sold 21,380 units, and Li Auto L9 and Zeekr 9X each sold over 10,000 units. This aligns with consumers' perception of the various large six-seat SUV launch events.
In contrast, the BMW X5, which once required markups and had long waiting lists, is left with just over 10,000 units, sandwiched between the Zeekr 9X and 009.
Overall, domestic brands are indeed gaining a stronger presence in the luxury car market above CNY 500,000. In the first half of this year, the share of domestic brands increased to 37%, compared to only 29% last year, and less than 8% three years ago [2].
People complain about the poor macro environment every day, yet they all switch to luxury NEVs. If this trend continues, they will just have to lower their budgets and buy a BMW.
Pricier Cars Sell Even Better
The domestic auto market has been very bleak this year. As of August, it has experienced year-on-year declines of over 20% for five consecutive months [3]. The total sales in the first eight months were 3 million units less than last year. A 20% year-on-year decline for the full-year market is the consensus among all automakers.
Among them, ICE vehicles are in a mess. They sold over 7 million units in the first eight months of last year, but this year they were directly cut by one-third, leaving just over 5 million units, dragging down the overall market.
NEVs did not shrink as dramatically, but they are not doing much better either. They accumulated a 12% decline in the first eight months, dropping from 7.59 million units in the same period last year to 6.67 million units [4].
However, further breakdown reveals that the decline across different price segments is not uniform. According to the breakdown for the first eight months, CNY 200,000 is a clear dividing line:
Below CNY 100,000: 2.59 million units last year, 2.01 million units this year, a decrease of 580,000 units; CNY 100,000-200,000: 2.85 million units last year, 2.43 million units this year, a decrease of 420,000 units;
CNY 200,000-300,000: 1.49 million units last year, 1.51 million units this year, an increase of 19,000 units; CNY 300,000-400,000: 430,000 units last year, 480,000 units this year, an increase of 50,000 units;
Above CNY 400,000: 210,000 units last year, 220,000 units this year, an increase of 15,000 units.
Overall, cheap cars have shrunk severely, while mid-to-high-end models continue to grow. In particular, the price segment above CNY 400,000 has a small base, so the growth rate is astonishing, with sales increasing by nearly 46% in the first half of this year. Even though it dropped to 39% in July, it still leads the CNY 300,000-level market.
Among them, the new AITO M9 sold over 30,000 units in its first three months on the market, and the CNY 500,000-level NIO ES9 sells nearly 10,000 units per month. Including Li Auto L9, Zeekr 9X, and others, the diverse "9-series" NEVs are the fastest-growing segment this year.
Extending the timeline to compare with 2023, the penetration rate of NEVs priced above CNY 500,000 expanded from 11% to 39% in the first half of this year, and the market size more than tripled. During the same period, the overall NEV penetration rate only increased from 35% to 62%, less than double.
Observing the internal sales structure of automakers also aligns with the reality that "pricier cars grow faster."
In the first half of the year, BYD's Dynasty and Ocean series sold 790,000 units (excluding exports), a year-on-year decline of a full 45%, while Fangchengbao surged by 115% and Yangwang grew by 94%.
Considering that the main sales volume of Fangchengbao comes from the Tai series, which is not particularly expensive, and Yangwang sold less than 2,000 units in half a year with a very small base, the persuasiveness might not be very strong. However, the situations of Geely and SAIC are quite obvious.
Geely's core brand Galaxy sold 520,000 units in the first half of the year, a slight decline of 5%, while Zeekr surged by 97% to 170,000 units, supporting nearly one-third of Geely's revenue with one-tenth of the sales volume.
Within SAIC, the affordable mainstay SAIC-GM-Wuling sold 750,000 units last year, dropping to 680,000 units this year. IM Motors sold 40,000 units in the first half of the year, which is not a large number, but it has doubled compared to last year.
The wind of consumption downgrading has swept across major industries, so why are NEVs starting to be an exception?
The Last Fortress
The domestic NEVs priced at CNY 500,000 are seizing the market share of luxury ICE vehicles.
Among China's annual passenger car sales of around 25 million units, those priced above CNY 400,000 account for less than 5%, but they excel in revenue contribution and have larger profit margins.
For example, NIO delivered only 190,000 units in the first half of this year, with a revenue of CNY 51.8 billion. Changan sold 1.19 million vehicles, with a revenue of only CNY 65.6 billion, simply because the ES8 and ES9 are priced high.
In the ICE vehicle era, this luxury car market was completely monopolized by foreign brands. Even when the NEV market began to explode in 2020, the market above CNY 500,000 remained the most solid barrier for ICE vehicles.
Taking the BMW X5, Mercedes-Benz GLE, Audi Q7, and Porsche Cayenne as reference points, as typical luxury ICE vehicles, their sales growth in China basically continued until 2023, hardly affected by the increase in NEV penetration rates.
Several of these models have plug-in hybrid versions, but their pricing is generally higher than the ICE versions, and sales are not good.
How popular was the vanguard BMW X5? In 2022, when the domestic NEV penetration rate broke through 25%, BMW made a crucial decision: localize the production of the X5. The starting price was lowered to CNY 605,000. The following year, domestic sales of the X5 soared to 93,000 units, hitting the ceiling of the luxury SUV market.
At this time, the fastest growth in NEV penetration was in the market below CNY 300,000, and Japanese and joint-venture automakers were hit the hardest. Meanwhile, luxury ICE vehicles above CNY 500,000 held out until 2024.
Mercedes-Benz rolled out a localization plan for the GLE in 2024, but the luxury ICE vehicle market had already changed. Last year, the BMW X5 and Mercedes-Benz GLE lost nearly 30,000 units in combined sales, and the official price cut of the new X5 at the end of the year failed to turn the tide.
In the first half of this year, the presence of ICE vehicles further diminished. The NEV penetration rate above CNY 400,000 increased to 70%, compared to 43% last year, and the penetration rate above CNY 500,000 is close to 40%. The diverse large "9-series" NEVs have made indelible contributions.
Have consumers become wealthier?
Further breaking down the market above CNY 500,000, the upward pricing of domestic NEVs is actually a context of consumption downgrading.
Price Wars Continue
If we observe the domestic auto market above CNY 500,000 without distinguishing by energy type, we will find two very interesting data points:
According to Jalandu's data, from 2019 to 2025, the annual sales volume in the domestic market above CNY 500,000 declined from 567,000 to 495,000. In the first half of this year, it is still declining compared to the same period last year.
In other words, although the "9-series" NEVs are selling more fiercely one after another, there is no overall growth in the market, and it remains a zero-sum game.
At the same time, from 2019 to the first half of this year, the average price per vehicle in the domestic market above CNY 500,000 dropped from CNY 828,000 to CNY 763,000, and the price center continues to shift downward.
After the NEV market exploded in 2020, the luxury ICE vehicle market above CNY 500,000 was actually not much impacted; both sales volume and average prices were rising, and the scale was still expanding. But the turning point appeared in 2024.
In 2024, the luxury car market began to see declines in both volume and price. Sales of luxury ICE vehicles such as the BMW X5 and Mercedes-Benz GLE turned downward in 2024, which also aligns with the perception of "consumption downgrading" in the consumer market.
The key is, from where to where did it drop?
According to Jalandu's data, from 2023 to the first half of this year, the share of the CNY 800,000-1,000,000 segment dropped from 19% to 8%. The CNY 600,000-800,000 segment dropped from 31% to 24%.
Correspondingly, the share of the CNY 500,000-600,000 segment grew from 24% to 53%, more than doubling, which is also the main price segment targeted by domestic "9-series" NEVs.
In other words, the domestic NEVs priced at CNY 500,000 correspond to the luxury ICE vehicle market of around CNY 800,000. A large number of audiences for luxury ICE vehicles priced around CNY 800,000 have switched to the newly launched domestic NEVs.
Well, it turns out that your downgraded life is still my upgraded goal.
For automakers, anchoring prices at the same level while upgrading configurations to a higher tier, using CNY 500,000 cars to grab the CNY 800,000 car-buying budget, is still the logic of price wars.
This tactic of "providing 56E experiences at the price of 34C" was very familiar to domestic NEVs priced at CNY 300,000 back in the day. Domestic NEVs come standard with TVs, refrigerators, and large sofas, while ICE vehicles of the same period required paid options for comfort features, and advanced driver assistance was limited to adaptive cruise control, resulting in an obvious lack of competitiveness at the same price point.
Therefore, the penetration rate of NEVs in the CNY 200,000-300,000 price segment grew very rapidly.
When the battlefield shifts to the CNY 500,000-600,000 price segment, the pricing space doubles, the cost burden is greatly relieved, and the advantages of this tactic also increase.
For example, a CNY 300,000 car can be equipped with a TV, refrigerator, and large sofa, but the cost red line is there. If you want rear-wheel steering, you cannot have a dual-chamber air suspension. If you want both, you have to price it at CNY 400,000 to make a profit. The comfort level leads ICE vehicles of the same class, but the chassis and space still need more effort.
When the price drops to CNY 500,000, apart from D-segment dimensions, configurations such as ±10° rear-wheel steering, tri-chamber air suspension, and top-tier audio systems can be fully uncompromised. Heavily tuned chassis and NVH can also be achieved by throwing in manpower and money.
Luxury ICE vehicles have a strict and orderly pricing system, where specific prices match specific configurations, which is the tacit understanding and rule formed over decades in the auto industry. If NIO's Sky chassis and Li Auto's active suspension were produced by Mercedes-Benz, pricing them at CNY 2 million would carry no psychological burden.
Domestic "9-series" cars are more practical. They adopt the pricing logic of high-volume cars, push up the BOM (Bill of Materials) cost, and fight upward across tiers. The higher the price segment goes, the greater the gap NEVs can create in terms of configuration and experience.
For luxury ICE vehicles, CNY 500,000 is a downward shift in the transaction focus; for domestic brands, CNY 500,000 is an upward breakthrough. Facts have proven that as long as someone does not care about the cost of flipping the table, tacit understandings and rules are just scrap paper.
Thus, the budget decline of the consumer group for luxury ICE vehicles coincidentally collided with the upward pricing of domestic NEVs, creating the market reality that "pricier cars sell even better."
After all, whether I downgrade from KFC to Pinhaofan, or you downgrade from Xin Rongji to Rong Xiaoguan, it is all called consumption downgrading.
References
[1] Yiche Data
[2] Domestic NEVs Break Through the High-Price Market: Observation on the Changes in the Market Pattern of Passenger Cars Above CNY 500,000, Jalandu
[3] CPCA (China Passenger Car Association)