Luxury ICE Vehicles Slash Prices to Clear Inventory as Domestic EVs Reshape Market Landscape

Recently, prices of certain luxury-brand internal combustion engine (ICE) vehicles have dropped significantly, with some models seeing discounts approaching 50%. For instance, the Range Rover Evoque L, originally priced at RMB 420,000, is now selling for around RMB 200,000, while the Jaguar XEL has fallen from RMB 340,000 to approximately RMB 170,000. This trend is closely linked to the rapid rise of domestically produced electric vehicles (EVs) in the RMB 200,000–600,000 price segment. Leveraging advantages such as high specifications and superior chassis tuning, Chinese EVs are steadily capturing market share previously held by traditional luxury ICE vehicles, exerting competitive pressure on mainstream models like the BMW 5 Series, Mercedes-Benz E-Class, and Audi A6L—collectively known in China as the “56E”—and prompting these brands to adjust their official pricing. In March this year, Chery Jaguar Land Rover announced it would cease production of all domestically manufactured ICE models except for imported variants, placing the Range Rover Evoque L and Jaguar XEL into end-of-life inventory clearance, further accelerating price declines. Meanwhile, overall ICE vehicle sales continue to shrink. Data shows that in May 2024, retail sales of ICE vehicles totaled 530,000 units, a 39% year-on-year drop, compared to only a 7% decline for new energy vehicles (NEVs) during the same period. Sales of ICE models across domestic, joint-venture, and luxury brands have all declined markedly, leading to high dealer inventories and prompting some brand dealerships to exit their franchise networks. Currently, NEVs account for over 60% of China’s passenger vehicle market, presenting structural challenges for the ICE segment. Although some ICE models are already priced at historically low levels, consumer concerns about residual value and long-term usability continue to dampen demand, making a near-term market recovery unlikely.