Report: China Tells Automakers To Stop Lowering Prices

While Chinese-built EVs are seeing an uptick in global sales, particularly in Europe, the home market has grown concerned that oversupply has become a massive issue. China’s government has reportedly asked the automotive sector to stop lowering prices.

The domestic vehicle war has apparently reached a point that China is in the process of amending national economic laws to stabilize supply and demand.

"The draft amendment, particularly the improvement of criteria for identifying unfair pricing behaviors such as low-price dumping, will help better protect the legitimate rights of consumers and businesses, and promote healthy economic development," Guo Liyan, deputy director of the Chinese Academy of Macroeconomic Research's Economic Research Institute, told the government-owned China Daily.

She added that, since China is a socialist nation, the government is obligated to help encourage fair trade practices that “will enhance the appeal and influence of China's unified national market, thereby providing a sound pricing environment to strengthen domestic economic circulation.”

China’s government has been aggressively subsidizing all-electric vehicles since the early 2000s. The plan was to create a bunch of competing automakers that would dominate the then-burgeoning New Energy Vehicle (NEV) space. Western nations had already started pushing stringent emission rules and manufacturers were signaling that combustion-engine automobiles would soon be supplanted by EVs. China saw this as an opportunity and did everything in its power to focus efforts on building electrified automobiles and establish a global stranglehold on battery production — assuming that it could beat foreign automakers to the punch.

Over the next two decades, scads of new auto brands and specialty suppliers were formed inside China. But many would eventually go under as the dominant nameplates established themselves and garnered sales beyond the home market. China likewise ended its nationally supported NEV purchasing subsidies late in 2022. While business has been good, leadership has grown concerned that China may be building more vehicles than it knows what to do with.

Ref: Report: China Tells Automakers To Stop Lowering Prices (thetruthaboutcars)