(Yicai) April 23 -- Tesla and a number of other car brands, including China’s Hycan and HiPhi, look set to pass on the Beijing International Automotive Exhibition that starts this week, as escalating price competition forces automakers to make economies.

A source at one company that will miss this year’s show said the cost of renting a stand is not cheap. In light of the current market situation, his firm intends to channel resources into areas that can boost sales, the person said.

This past weekend, Tesla sparked a fresh round of price cutting in the Chinese auto market, the world’s largest, with Beijing-based Li Auto following suit yesterday.

The price cutting that started over a year ago hit profits in the first quarter, Cui Dongshu, secretary-general of the China Passenger Car Association, said on April 9. The price war is likely to remain intense this year, making it a critical one for new energy vehicle makers to gain a foothold, according to Cui.

HiPhi, an electric vehicle brand of Human Horizons, may be another no-show in Beijing. It has told staff about a production suspension and is seeking new funding or cooperation with other car companies, an analyst said. Hycan, partly owned by GAC Aion New Energy Automobile, is focusing on increasing sales after releasing the multi-purpose vehicle V09 last year.

Meanwhile, Tesla failed to meet delivery expectations in the first quarter, is laying off employees worldwide. The US EV maker did not attend the auto shows in Shanghai or Chengdu last year.

Dongfeng Peugeot Citroen Automobile, a joint venture of Stellantis and China's Dongfeng, started cutting cots last year, but achieved limited sales growth. In the past two years, the JV sold a plant to Dongfeng's JV with Honda Motor, as well as transferred facilities and land use rights in Hubei province’s Wuhan and Xiangyang to the Chinese shareholder.

But China’s NEV market remains vibrant as the entry of new players, such as the EV arm of Xiaomi, and price wars indicate robust growth.

Auto China, as the Beijing motor show is also known, is a biennial event. It was last held in 2020 due to the Covid-19 pandemic. This year’s event will start on April 25.

Editor: Emmi Laine