(Yicai) Feb. 9 -- Passenger car prices in China fell more sharply in January than the annual average for last year, after the government halved the purchase tax exemption for new energy vehicles, according to new industry figures.

Last month’s average discount was CNY37,000 (USD5,330) per auto, and the average price for discounted models was CNY248,000 (USD35,820), Cui Dongshu, secretary-general of the China Passenger Car Association, posted on the CPCA’s official WeChat account yesterday.

Both electric and internal combustion engine vehicles saw prices fall, the post showed. The average price of discounted NEV models was CNY253,000, with an average cut of CNY38,000, or 14.8 percent. For discounted ICE vehicles, the average price was CNY238,000, with a 15 percent cut of CNY36,000.

January’s reductions far exceeded the average 10.5 percent discount recorded for the whole of 2025. Cui said the latest round of cuts spans a wide range of models and is concentrated in higher-priced vehicles, underscoring an intense reshaping of pricing structures in China’s premium auto market.

On Jan. 1, the purchase tax break for NEVs was reduced to 5 percent from 10 percent, with a maximum exemption of CNY15,000.

Among NEVs, the biggest price reduction last month was for BMW’s i3 pure electric model, whose entry level guide price fell to CNY278,000, a cut of CNY75,900 or 21.4 percent. The steepest percentage drop was also for a BMW, with the X1 pure electric model reduced by 24 percent, or CNY71,900.

Among ICE cars, the BMW 3 Series posted the steepest discount, with its guide price lowered to CNY258,000, a reduction of CNY50,000 or 19.3 percent. The sharpest percentage decline was for Dongfeng Honda’s HR-V, whose price dropped 31.3 percent, or CNY75,900, from its previous minimum guide price.

Editor: Tom Litting