On Thursday, Li Auto revealed cash subsidies of 15,000 yuan ($2,055) for each vehicle purchased, along with a three-year zero-interest financing option.
Similarly, Nio introduced a zero-interest loan program for buyers of its Nio and Onvo-branded electric vehicles on Wednesday.
These incentives aim to stimulate purchases ahead of the new year's government subsidy initiatives. By mid-December, over 5.2 million vehicles had been sold with the benefit of Chinese government subsidies.
China has indicated plans to extend consumer goods trade-in programs into 2025, although the details regarding nationwide policy implementation remain uncertain.
Earlier this week, Nanjing, the capital of Jiangsu province, announced it would continue offering subsidies of up to 4,000 yuan per vehicle purchase this year.
According to Reuters, Chinese authorities have agreed to issue 3 trillion yuan in special treasury bonds this year, as Beijing intensifies fiscal stimulus efforts to rejuvenate a struggling economy, partly through subsidy programs.
Local electric vehicle leader BYD, which is poised to potentially outsell Ford and Honda globally in 2024, has been providing discounts of up to 11.5% on two of its models—one hybrid and one electric—since December.
Tesla, which initiated the price war last year, has prolonged a 10,000 yuan discount on outstanding loans for its top-selling Model Y in China until the end of this month.
Sales of electric vehicles and plug-in hybrids, collectively referred to as new energy vehicles (NEVs) in China, exceeded 10 million units last year, largely due to government-subsidized trade-ins of up to 20,000 yuan for NEVs.
However, data indicates that auto-related retail sales declined by 0.7% year-on-year in the first 11 months, contrasting with a 3.5% increase in overall retail sales in China, highlighting the effects of price reductions.