AP: China Takes Action to Curb Price War in the Electric Vehicle Industry
AP reported on July 4 that the Chinese government has issued a warning signal about the vicious price competition in the domestic electric vehicle market and has taken measures to intervene. Market leader BYD sold 2.1 million units in the first half of this year, an increase of 31% compared to the same period last year, with nearly half being pure electric vehicles. However, its significant price cuts in late May triggered a new round of price wars, drawing criticism from the industry. Wei Jianjun, chairman of Great Wall Motor, warned that such disorderly competition could lead to a repeat of Evergrande's fate, endangering the healthy development of the industry. Subsequently, the China Association of Automobile Manufacturers called for fair competition, and the Ministry of Industry and Information Technology also stated that it would rectify the "cutthroat" price war. In June, 17 automakers, including BYD, pledged to pay suppliers within 60 days to alleviate supply chain pressures. Murti Grandhi, a financial risk analyst at GlobalData, pointed out that BYD's price war, leveraging its market dominance, has led to losses across the entire industry. Yang Jing, head of the automotive industry at Fitch Ratings, said these measures aim to reverse the downward price expectations, but their effectiveness remains to be seen. Data shows that BYD's overseas sales increased by more than double to 464,000 units in the first half of the year, while the US and Europe have imposed additional tariffs on Chinese electric vehicles.
Original article: https://www.toutiao.com/article/1836704590180364/
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