China moves to tame 'irrational competition' as EV price war persists

China moves to tame 'irrational competition' as EV price war persists

Beijing has poured vast state funds into the electric vehicle sector, supporting the development and production of less polluting battery-powered autos
Beijing has poured vast state funds into the electric vehicle sector, supporting the development and production of less polluting battery-powered autos. Photo: - / AFP/File
Source: AFP

Chinese officials are seeking to tame the country's swelling electric vehicle industry with policies to prevent "irrational competition", state media said, as a brutal price war ensnares top automakers.

Beijing has poured vast state funds into the EV sector, supporting the development and production of less polluting battery-powered vehicles.

But a price war has left many startups bust as firms flood the domestic market with low-cost cars and trade-in schemes, offering huge discounts to customers to give up their old auto for a new one.

Domestic criticism has mounted in recent months against intra-industry "involution" -- a popular tag used to describe the race to outcompete that ends up nowhere.

A meeting of top officials in Beijing -- chaired by Premier Li Qiang -- called Wednesday for tighter price monitoring and improving long-term regulation of competition in the sector, state news agency Xinhua said.

Officials called for stronger order in the new energy vehicle market to "curb irrational competition" and spur more healthy development, Xinhua said.

"It is necessary to... strengthen industry self-discipline" and help companies enhance their competitiveness through technological innovation, the agency quoted officials as saying.

The China Association of Automobile Manufacturers, a top industry group, warned in May that "disorderly" competition would exacerbate harmful rivalry and hurt growth.

Analyst Bill Bishop wrote in his Sinocism newsletter that the wording of Wednesday's readout could suggest Beijing will place "price controls" on electric vehicles.

"The language on the new energy vehicle (NEV) industry was tough, in another sign that the government is going to intervene to rectify the 'irrational competition' in the industry," he wrote.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.