On January 13, Huawei-backed electric vehicle brand AITO suddenly announced price reductions of 30,000 yuan ($4,462), bringing the cost of its M5 and M7 EVs down to 259,800 yuan and 289,800 yuan, respectively. The move is seen as a direct response to Tesla’s recent price reductions in the Chinese market.
The AITO M5 extended range edition has not seen a price reduction this time. According to the China Passenger Car Association’s data, in 2022, the sales volume of the M5 extended range version was nearly 49,000, while that of M5 EV was less than 10,000 and that of M7 exceeded 21,000.
AITO’s products are all derived from the Seres’ DE-i intelligent platform, which can cooperate with the third-generation range extender, drive system, battery and other core components for the best matching. Huawei’s HarmonyOS intelligent cockpit is also available for AITO owners.
Since officially starting delivery in March 2022, AITO has delivered more than 75,000 vehicles. On the one hand, it is backed by Huawei, which has helped it accumulate a certain user base. On the other hand, it is targeting the price range of over 300,000, in which most models made by Chinese EV makers are now located.
Different from Tesla China’s attitude of not compensating anything to consumers, AITO will compensate car owners who picked up their cars before 8:30 am on January 13 with a gift worth 33,000 yuan to 35,000 yuan, including an eight-year vehicle warranty and 120,000 AITO points that can be used to buy Huawei products. M5 buyers can enjoy free basic maintenance services for two years.
In addition, an OTA upgrade will be carried out in the near future for all models, with new functions such as a “super desktop,” intelligent car search and automatic HUD height adjustment.
In contrast to the fierce complaints incited by Tesla’s sudden price reduction, AITO’s move eased users’ dissatisfaction to a certain extent. For example, one blogger said that he just picked up the M5 EV on January 5, and now he can buy the performance version with the same money. Considering the compensation package, he still believed that what he was facing was better than that of Tesla buyers.
In addition, Huawei’s automotive department is facing significant pressure. Earlier, Richard Yu, the CEO of Huawei’s Terminal BU, said that the automobile is Huawei’s only loss-making business. According to LatePost’s report, Yu said in a recent internal meeting that the department should become profitable before 2025.