Rapid technological convergence and intensifying competition are making cars increasingly similar in China's new energy vehicle industry, raising questions about profitability and long-term differentiation in the world's largest auto market.

Speaking during a media briefing last week, Paul Gong, head of China Auto at UBS Global Research, said China's once-diverse EV landscape is beginning to converge around similar product designs, features and market strategies.

This was evidenced by the Beijing auto show, the largest of its kind this year. At the biennial event in April, over 1,450 cars were exhibited, of which 181 made their debuts. "It may have been the most homogeneous Beijing auto show we've seen in the past decade," Gong said.

Only a few years ago, Chinese NEV makers were pursuing sharply different technological approaches. Some companies focused on battery-swapping systems, others emphasized extended-range hybrid technology, and they competed aggressively around autonomous driving, vehicle software or performance-oriented NEV platforms.

Now, however, many automakers are concentrating around similar categories, particularly large family-oriented SUVs equipped with oversized screens, intelligent cockpits and advanced driver-assistance systems.

The trend reflects both the maturity of China's NEV sector and the competition in a market crowded with dozens of brands.

"The level of product similarity has become much higher," Gong said, adding that many manufacturers are rushing to compete in the segment of full-size flagship SUVs this year, targeting similar consumer groups with overlapping specifications and nearly identical interior layouts.

Last week alone, Great Wall Motor's Wey marque launched its V9X, BYD's Denza its N9, and XPeng its GX. This week, Aito's new M9 and Nio's ES9 are to hit the market.

The convergence is occurring at a time when China's NEV market is facing intense pricing pressure.

Over the past two years, automakers across the industry have repeatedly cut prices, launched updated models at a faster pace and expanded into overlapping segments in an attempt to maintain sales growth.

The result is a shrinking product life cycle that pressures profitability.

According to Gong, some newly launched vehicles now reach peak sales within three to six months after entering the market. Meanwhile, demand can weaken significantly after only one year; an increasingly difficult dynamic for companies spending billions of yuan on vehicle development.

"If a model only remains competitive for several months, recovering development costs becomes extremely challenging," he said.

Gong compared the evolution of China's NEV industry to the smartphone market, where years of experimentation eventually gave way to hardware standardization and competition shifted increasingly toward software ecosystems and user experience.

"In many consumer electronics industries, products evolved from diversity to convergence," Gong said. "Cars could be moving in a similar direction."

The comparison is becoming more relevant as vehicles increasingly function like software-driven electronic devices.

Consumers are placing greater emphasis on digital interfaces, connectivity, intelligent driving systems and AI-powered features, according to a recent survey by McKinsey.

Reliable technology, user experience and brand credibility are prioritized by consumers over big discounts, according to the survey that was released in early May.

McKinsey found that among consumers who purchased a car within the past year, 22.2 percent viewed the ongoing price war negatively, compared with 16.5 percent who held a positive view.

But Gong said the industry's biggest challenge may no longer be technology itself, but how companies maintain differentiation and profitability in an increasingly crowded market.

lifusheng@chinadaily.com.cn