China’s National Development and Reform Commission (NDRC) has warned that a price war among electric vehicle (EV) and plug-in hybrid automakers is likely to escalate this year. The warning comes as the NDRC anticipates the launch of over 110 new energy vehicle (NEV) models out of a total of 150 new cars in 2021, intensifying competition in the market. Despite an estimated market demand of 2.1 million units for new energy vehicles (NEVs), including EVs and plug-in hybrids, top NEV brands such as BYD, Aito, and Li Auto have planned to increase deliveries by 2.3 million units for 2024, indicating an oversupply situation. The declining battery costs and economies of scale are expected to drive price cuts in NEVs, ranging from 5% to 10% this year, particularly in cities like Shenzhen, where EV adoption is high, according to the NDRC. Leading the price cuts are companies like BYD and Denza, which have already reduced prices by 7.15% to 9.7% for five models in April compared to the beginning of the year. Li Auto has also reduced prices on four of its models, following in the footsteps of Tesla and BYD.