Why Chery's Strategy Matters to the EV World

Chery chairman Yin Tongyue with Exeed ET5 electric SUV

By EVWorld.com Si Editorial Team

Chery chairman Yin Tongyue's comments during China's 2026 Two Sessions offer a clear signal about the next phase of EV competition. Instead of joining the ongoing price war, he insists that Chery will not engage in low-level price battles, but will compete through technology, management empowerment and quality upgrades. This stance stands out in a market where many EV makers are cutting prices or offering aggressive financing to chase volume.

From price war to value competition

The Chinese auto market has been flooded with discounts and incentives. The article notes that some models, like the Honda Accord e:PHEV, saw cuts of 100,000 yuan, while brands including Tesla, NIO and Leapmotor rolled out seven-year ultra-low interest loans. These tactics boost short-term sales but compress margins and can starve companies of the resources needed for long-term innovation. Industry analysts describe 2026 as a zero-sum game environment, where growth is limited and competition intensifies.

Against this backdrop, Chery's decision to raise the official guide price of the EXEED ET5 210 LIDAR Premium Edition by 5,000 yuan is symbolic. EXEED explains that the move is primarily a strategic choice to ensure stable R&D investment, product quality and user service, rather than just a reaction to rising chip costs. It is a deliberate bet that customers will pay for value instead of chasing the lowest sticker price.

Rising tech costs and strategic pressure

The article highlights growing cost pressures in the EV ecosystem. NIO's William Li points out that automakers cannot compete with AI and computing centers for chips, whose investments reach hundreds of billions of dollars. Xiaomi's Lei Jun notes that memory prices rose 40-50 percent in a single quarter, adding several thousand yuan to the cost of a car. As EVs become more software- and hardware-intensive, relying on deep discounts becomes increasingly risky.

Chery's 32 billion yuan R&D bet

Chery's response is to double down on technology. Yin reveals that the company's 2026 R&D budget exceeds 32 billion yuan, focused on solid-state batteries, high-computing chips, robotaxis, green energy, green materials, green computing and AI. The article notes that Chery's cumulative AI investment has already surpassed 40 billion yuan, supported by more than 10,000 R&D personnel. This scale of spending places Chery among the most ambitious tech investors in China's auto sector.

AI, smart driving and the software-defined EV

At its "Technology with AI" night in Wuhu, Chery showcased its Falcon smart driving family. The Falcon 500 enables urban navigation assisted driving, the Falcon 700 uses 27 high-precision sensors and the Falcon 900 maps a path toward L3 and L4 applications in passenger and commercial vehicles. In the smart cockpit, Chery launched the AI agent "Xiao Qi", which integrates more than 40 intelligent modules and uses a quantum encryption security platform to keep privacy in the car and data in the cloud.

Chery's AI ambitions extend beyond cars. Its humanoid robot "Mo Yin", developed by AiMOGA Robotics, has EU CE certification and is deployed in over 100 scenarios across more than 30 countries. This broader AI ecosystem reinforces Chery's identity as a tech-driven mobility company rather than a traditional automaker.

Global impact and the future of EV competition

As a leading exporter with more than 6 million cumulative vehicle exports and 23 consecutive years at the top among Chinese passenger car brands, Chery's strategy has global implications. Its shift from price gaming to value competition suggests that the EV industry is maturing. Future winners are likely to be those with strong technology stacks, robust R&D pipelines and differentiated user experiences, not just the lowest prices.

For EV world followers, this article marks an inflection point. Chery is betting that the next era of EV competition will be defined by AI, batteries, chips and software, and that sustainable profits will come from delivering superior value rather than racing to the bottom on price.

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