Competition Pressure Heating Up in China EV Space; We Prefer Nio and BYD-H

We see intensifying price pressure in China's new energy vehicle, or NEV, market, especially in the mass-market and entry-level premium segments. After Tesla’s late October China price cuts, several automakers followed suit, offering direct discounts, insurance rebates, and other incentives. Coupled with the national subsidy expiring in 2023, we anticipate the CNY 150,000-CNY 300,000 price segment to face greater competition. With such a backdrop, we maintain our preference for Nio for its premium brand positioning and BYD for its strong plug-in hybrid model lineup.