China shows signs of tackling the price wars that are taking a toll on its EV industry

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China shows signs of tackling the price wars that are.jpeg

BEIJING (AP) – The Chinese government indicates enough when it comes to fierce competition in the country’s electric car market.

China’s industrial policy has designed a remarkable transformation of electric cars in the largest car market in the world. In doing this, I was born more than my makers than he could survive. Now, the long fears of the increase in the increase in wars in the foreground, even with the rise of the main sales numbers to new horizons.

The BYD market commander announced this week that its sales grew by 31 % in the first six months of the year to 2.1 million cars. He said approximately half of the pure electric vehicles and the rest was the hybrid deposit in the files of the Hong Kong Stock Exchange. The company connects the internal combustion engine cars in 2022.

BYD was subjected to veiled criticism in late May when she launched a new round of price cuts, and many competitors followed his example. Great Wall Motors has warned that the industry may be threatened if it continues on the same path.

“When the volume of folders increases, it is very difficult to manage and become bullseye,” said Lee Xing, an independent analyst who follows the industry.

The government is trying to curb the so -called “engagement” – a term initially applied to the mice race for youth in China and now to companies and industries participating in meaningless competition that does not lead to any place.

Mortth Grande, India -based financial risk analyst in Globalata, said that BYD was criticized for using his dominant position in ways that some consider unfair wars, which sparked the price war that caused losses throughout the industry.

With price war in its fourth year, Chinese auto companies are looking abroad for profits. BYD sales abroad multiplied to 464,000 units in the first half of this year. Governments imposed concern in the United States and the European Union a tariff on electric cars made in China, saying that the benefits gave them an unfair advantage.

Market captain BYD is attacked

The last handwriting seizure began when the BYD reduced the price of more than 20 models on May 23.

On the same day, Great Wall Motors, Wei Jianjun, said he was pessimistic about what he called the “healthy development” of the EV market. He compared to Evergrande, the Chinese real estate giant who sent the collapse of the entire industry into a shrinkage that he has not yet recovered.

He said in a video posted on social media: “Evergrande in the auto industry is already present, but it has not yet exploded.”

Two days later, BYD CEOs rejected any comparison with Evergrande and published data -full plans to support his case.

“Frankly, I am confused and angry, which is ridiculous!” Li Yunfei, General Manager of BYD brands and public relations, wrote on social media. “All of these come from the horrific observations made by the Chairman of the Board of Directors and any of the great wall engines.”

After that, the government and the industry association had reached. The China Car Manufacturers Association called for fair competition and health development for the industry, noting that the main price cuts by a car industry company caused a new price war in prices.

On the same day, the Ministry of Industry and Information Technology pledged to address competition, such as engaging in the automotive industry, saying that the recent non -disciplined price wars were putting a treatment for healthy and sustainable development of the sector.

“Perhaps this price reduction may have been the final straw that has angered competitors and organizers on the cruelty that BYD continues to show,” he told me.

He promised to pay suppliers within 60 days indicating a possible shift

The following month, 17 car manufacturers, including BYD, pledged: they will pay their suppliers within 60 days.

One of the ways that car manufacturers in China from the wars of bruising prices is to delay payments for several months. The agreement, if adhered to, will reduce the financial pressure on suppliers and can curb some fierce competition.

“The introduction of a 60 -day payment pledge is the government’s invitation to oppose the competition similar to the involvement,” said Koy Dongcho, Secretary -General of the China Automobile Association.

It also reduces the risk of an Evergrande scenario.

Many car manufacturers have extended payments by pushing suppliers who have short-term debts-promised to pay them in a certain period of time-instead of cash. Real estate developers used the same system. I did not even do. When Evergrande left her debts, the suppliers have left the valuable promises to pay.

“This practice is seen as a possible cause of a greater crisis, similar to what happened with Evergrande,” said Grande.

Jing Yang, director of Fitch Repings, who focuses on the auto industry, said the promises to accelerate payments and invite the government to curb the price war, as well as the decline in some financing offers, indicating an attempt to reflect the declining prices.

She said: “We may see the effectiveness of these measures in contrast to the price of the price and how this will affect the request of EV in the coming quarters.”

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The Associated Press Press Ping in Beijing contributed to this report.

2025-07-04 01:24:00

0 4 minutes read