In March, the competition in the new energy vehicle market intensified, leading to a new phase of rivalry among automakers. The after-sales service sector has emerged as a critical battleground. Companies like NIO and Aion are breaking traditional 4S dealership boundaries by offering services such as free on-site maintenance and waiving service fees for delays exceeding 45 minutes in an effort to attract customers. Meanwhile, despite high sales figures, Xiaomi’s automotive division has been criticized for having insufficient service outlets and lagging in after-sales support.
The competition in the new energy vehicle market has now entered its second half, characterized by a fierce elimination process. Although Neta Auto is struggling to survive, other brands like Zhidou and Reading are gaining attention. Several automakers released their annual reports for 2024, revealing a clear division within the industry. Li Auto reported a net profit of 8 billion yuan, leading the new forces in the market, while BYD, as the industry leader, posted an impressive net profit of 40.254 billion yuan. However, many companies are still facing substantial losses, with Xiaomi reporting a loss of 6.2 billion yuan in its first year, and NIO setting a record loss of 22.4 billion yuan. Other companies like Zeekr, XPeng, and Leap Motor also reported varying degrees of losses.
March saw a flurry of new vehicle launches and continued price reductions, leading to an escalating price war. Unlike previous aggressive discount strategies, the current approach has shifted towards a more sustainable “value war,” featuring extended warranties, financial subsidies, and promotional offerings without additional costs. As the Shanghai Auto Show approaches, advancements in smart technology are set to become the focal point of this new competitive wave, with automakers facing multifaceted pressures including sales losses, differentiated after-sales services, and the development of 4S dealership networks, which could widen the competitive gap and further highlight industry consolidation.
1. Developments in New Energy After-sales Service
1.1 NIO and Aion Intensify After-sales Services
On March 13, it was reported that NIO plans to launch free on-site maintenance services in selected regions, regardless of vehicle brand. This initiative includes services like tire repair and air filter cleaning, set to begin on March 15. In comparison, Aion announced a comprehensive upgrade to its after-sales services on March 20, introducing competitive offerings such as lifetime warranties for paint repairs and a guarantee that basic maintenance will not exceed 45 minutes, with free service for any delays. Additionally, if quality repairs take longer than 24 hours, a substitute vehicle or financial compensation will be provided, along with a tenfold compensation guarantee for defective parts.
Meanwhile, traditional automakers are also upgrading their after-sales services. Audi has led the way with commitments to 60-minute quick maintenance, 8-hour bodywork repairs, and 24/7 roadside assistance. Chery offers lifetime warranties for all models, while FAW Volkswagen has introduced lifetime warranties for original parts. Both new energy and traditional automakers are increasingly focusing on locking in customers with enhanced after-sales services, aiming to keep users within their ecosystems throughout the vehicle lifecycle. This shift poses a significant challenge to independent after-sales providers, who previously relied on convenience and cost-effectiveness to compete with 4S dealerships.
1.2 Ningde Times Launches CTP Battery Repair Service
On February 28, Ningde Times announced through its “Ningjia Service” platform the launch of the “CTP Battery Repair Service,” which allows for the repair of critical components of new energy power batteries that may experience faults or damage. This service includes repairs for parts such as FPC, water-cooled plates, and lower housings. Warranty coverage remains intact for in-warranty repairs, while out-of-warranty repairs will come with a mileage guarantee ranging from 10,000 to 20,000 kilometers, with the water-cooled plate warranty reaching up to 50,000 kilometers. The service is available at 607 Ningjia Service locations across the country, along with 12 battery repair centers.
Compared to complete battery replacements, repair costs are significantly lower, which could reduce the overall ownership costs for new energy vehicle owners and alleviate the burden on insurance companies regarding the comprehensive cost rates associated with electric vehicles. However, the details regarding the extent of repairability and associated costs remain unclear, which may lead to disputes in practical applications. Nevertheless, this initiative represents a key attempt to lower repair costs in the new energy vehicle after-sales market.
1.3 Xiaomi SU7 Faces After-sales Service Challenges
Recently, several Xiaomi vehicle owners reported that the number of after-sales service outlets is inadequate to meet the demand. A Shanghai owner mentioned that scheduling repairs requires a two-week wait, while a Hubei owner stated that replacing a tail light or repainting can only be done in Wuhan, necessitating a 700-kilometer round trip. In response to these concerns, a media inquiry revealed that the Shanghai service center is fully booked for nearly two weeks, and the earliest available appointment in Baoshan is not until April 11. Furthermore, repair services for the Xiaomi SU7 do not include substitute vehicles, except for the Ultra model.
In 2023, Xiaomi sold 11,000 vehicles in Shanghai, but there are only two service centers in the city, meaning that each outlet is responsible for the after-sales needs of approximately 5,500 vehicles. As of March 6, Xiaomi had delivered a total of 180,000 vehicles and plans to deliver 350,000 by 2025. In April 2024, Xiaomi stated it would gradually expand its after-sales service network, aiming to cover about 80 cities nationwide by the end of 2024. By the end of March, Xiaomi had 127 service outlets nationwide, with plans to add 33 more in April. However, most service centers are located in major cities, leaving rural and western regions with minimal coverage.
Despite the insufficient after-sales support, Xiaomi encourages owners to use authorized service channels, as those not using official channels may forfeit warranty benefits. Nonetheless, as seen with Tesla’s decade-long investment in building a service network, Xiaomi must quickly address these gaps or risk losing customer trust and market share.
2. Current Status of Automakers
2.1 Neta Auto Secures Funding Amid Struggles
Neta Auto, which recently secured funding, continues to face significant challenges. The company’s difficulties began in mid-October when a user claiming to be a Neta employee revealed on a professional networking platform that the company was unable to pay salaries. Following this, Neta clarified that the rumors were due to adjustments in salary structures and that salary payments would be delayed rather than unpaid. However, by late October, reports emerged of pay cuts for research and development staff, prompting the company to announce an employee stock incentive plan, allocating 5% of shares, valued at approximately 2 billion yuan, to employees.
In addition to rumors of unpaid wages and layoffs, Neta Auto faced legal action from suppliers over unpaid debts. Despite a strong presence at the Guangzhou Auto Show in November, the company’s factory in Tongxiang, Zhejiang, reportedly ceased operations, leading to layoffs. Several Neta Auto stores in cities like Shanghai and Beijing have also closed down. Amidst this turmoil, Neta announced on December 6 that its CEO had stepped down, and the founder outlined six major reform measures for a “second startup.” However, doubts about the company’s survival persist, especially as reports of its website crashing and the subsequent need to dispel bankruptcy rumors surfaced.
On March 20, Neta announced a partnership with NLTH in Thailand for wholesale and retail collaboration, securing a credit line of 10 billion baht (approximately 2.14 billion yuan). The company also reached an agreement with 134 core suppliers for a debt-to-equity swap totaling over 2 billion yuan. While this funding has provided a lifeline, industry experts suggest that Neta needs to leverage more strategic advantages to return to growth, especially in a fiercely competitive new energy vehicle market.
2.2 Overview of 2024 Financial Reports from Automakers
In March, several automakers released their 2024 financial reports, revealing varied profitability among new energy brands. Li Auto topped the list with a net profit of 8 billion yuan, while Silex achieved its first profit. Conversely, NIO reported massive losses of 22.4 billion yuan, and companies like Xiaomi, XPeng, Zeekr, and Leap Motor also experienced varying losses.
- Li Auto: Reported revenue of 144.5 billion yuan, up 16.6%, with a net profit of 8 billion yuan, though profits decreased by 31.9% due to declining gross margins.
- Silex: Achieved record revenue of 145.176 billion yuan, up 305.04%, and a net profit of 5.946 billion yuan, benefiting from high transaction prices for its Aion brand.
- NIO: Generated revenue of 65.73 billion yuan, an 18.2% increase, but suffered a net loss of 22.4 billion yuan, a widening loss from the previous year.
- Xiaomi: Recorded revenue of 32.8 billion yuan with a gross margin of 18.5%, but had an adjusted net loss of 6.2 billion yuan.
- XPeng: Reported total revenue of 40.87 billion yuan, marking a 33.2% increase, while net losses decreased significantly compared to the previous year.
- Zeekr: Achieved total revenue of 75.91 billion yuan with a net loss of 5.79 billion yuan, though sales increased by 87%.
- Leap Motor: Reported revenue of 32.16 billion yuan, up 92%, with a net loss of 2.82 billion yuan.
- BYD: Achieved revenue of 777.1 billion yuan, up 29%, with a net profit of 40.25 billion yuan, and sales reached a record 4.27 million vehicles.
3. Ongoing Price War and Market Competition
Since the beginning of the year, new energy automakers have employed various strategies to capture market share. The price war continues with tactics ranging from limited-time pricing to trade-in incentives and promotional offers. In March, this price war persisted, with notable price cuts on several models, including reductions for XPeng vehicles and discounts on NIO models.
Reports indicate that 23 vehicle models participated in the price reduction campaign in March, with the average drop for new energy vehicles at 17,000 yuan, and an overall market decline of 8.8%. Although this price competition is fierce, the automotive industry is facing a common struggle with profitability, as evidenced by a report indicating a decline in profit margins across the sector. Experts suggest that achieving annual sales of 300,000 vehicles is merely the survival threshold, while reaching 1 million units is crucial for stability. The ongoing price war will likely continue in increasingly aggressive forms as manufacturers vie for dominance.
4. Industry Challenges and Talent Shortage
4.1 Shortage of New Energy Vehicle Technicians
The after-sales service for new energy vehicles is currently grappling with a severe talent shortage. As of the end of 2024, there are approximately 31.4 million new energy vehicles in China, but fewer than 20,000 repair enterprises exist, with specialized technicians numbering less than 100,000. This imbalance has driven up salaries, with new energy vehicle technicians earning an average monthly salary of 8,000 to 15,000 yuan, double that of traditional fuel vehicle technicians in first-tier cities. Some even earn as much as 20,000 yuan.
Despite the lucrative salaries, the industry faces a persistent labor shortage. As the number of new energy vehicles continues to grow, the demand for repairs is expected to reach 3.5 million vehicles this year. Industry insiders have noted that while companies may offer higher salaries for new energy technicians compared to traditional ones, the qualified candidates remain scarce. The requirements for working on new energy vehicles are stringent, necessitating expertise in battery management systems and high-voltage safety protocols, along with proficiency in using advanced diagnostic equipment.
Additionally, the rapid technological evolution in the new energy sector means that technicians must possess strong learning capabilities to keep up with the latest advancements. This requirement complicates the transition for experienced fuel vehicle technicians and leaves a limited pool of young talent entering the field. Overall, the cultivation of skilled technicians for new energy vehicle maintenance remains a significant challenge.
4.2 Decline in New Energy Vehicle Related Company Registrations
According to data from Qichacha, as of March 2025, there are 1.2415 million registered new energy vehicle-related companies in China. The trend over the past decade shows an initial rise followed by a decline; from just 19,500 in 2015, the number peaked at 319,400 in 2023, but fell to 311,100 in 2024, marking the first negative growth in a decade. In 2025, 52,900 new energy-related enterprises were registered, with 41,400 in the first two months alone, reflecting a 16.48% increase from the previous year.
Despite the continuous rise in new energy vehicle ownership, the number of related company registrations declined for the first time in 2024. This phenomenon is closely linked to changes in industry competition. Data shows that while over 487 new energy vehicle manufacturers existed in 2017, only about 40 remain as of 2024, with more than 400 companies eliminated over the past six years. The rising market concentration and a return to rational capital investments are key factors driving this trend, as leading brands like BYD, Tesla, Geely, and NIO continue to expand their market share while smaller companies struggle with technological development and cost management.
Looking ahead to 2025, favorable policies such as tax exemptions for vehicle purchases and subsidies for vehicle scrapping are expected to significantly boost the new energy vehicle sales market. Estimates suggest that up to 5 million vehicles may be scrapped, with effective replacement policies potentially allowing for the replacement of 10 million vehicles. However, as market policy benefits wane, companies will face genuine competition, making the post-2025 landscape even more challenging.
