China shows signs of dealing with price wars that have caused losses to its electric vehicle industry
Beijing (AP) – The Chinese government’s signal is enough amid fierce competition in the country’s electric vehicle market.
China’s industrial policy has made a significant shift in electric vehicles in the world’s largest automobile market. In this way, it produces manufacturers far beyond survival. Now, even as title sales numbers soar to new heights, long-term concerns about oversupply and debilitating price wars are about to emerge.
Market leader Byd announced this week that its sales rose 31% to 2.1 million vehicles in the first six months of the year. It said in Hong Kong Stock Exchange filings that nearly half of them are pure electric vehicles and the rest are plug-in hybrids. The company phased out internal combustion engine vehicles in 2022.
Byd was slightly criticized when he launched a new price cut in late May, with several competitors following suit. The chairman of the big city warned that the industry could be threatened if it continues to adopt the same trajectory.
“When the number is bigger, it’s hard to manage and you’re going to be a bull market,” said Lei Xing, an independent analyst who is following the industry.
The government is trying to curb the so-called “interaction”, a term originally applied to the rat race of young Chinese people and is now a company and industry engaged in meaningless competition.
Byd has been criticized for the way some believe the price wars are triggered by inequity, said Murthy Grandhi, a financial risk analyst at Inlobaldata.
With the fourth year of the price war, Chinese automakers are seeking profits abroad. In the first half of this year, BYD’s overseas sales doubled to 464,000 units. The U.S. and the EU are concerned that governments impose tariffs on Chinese-made electric vehicles, saying subsidies give them an unfair advantage.
Market leader Byd is attacked
The latest hand volatilization began when Byd lowered the price of more than 20 models on May 23.
On the same day, Wei Jianjun, chairman of Dacheng Electric, said he was pessimistic about what he called the “healthy development” of the electric vehicle market. He compared to Chinese real estate giant Evergrande, whose collapse has put the industry in an unrecovered downturn.
“Evergrande in the automotive industry has existed, but has not exploded yet,” he said in a video message posted on social media.
