Evangelization or development? China wants to stop the EV price war, but analysts are doubtful

BEIJING – Chinese organizers were not happy with the prices that breed it in the auto sector, but players and analysts in the industry only see the heating of competition.

“A certain car industry company has taken the initiative to launch significant price cuts, and many companies followed their example, which led to a new round of “Price war” panic, The Chinese Automobile Manufacturers Association said in a statement in Chinese on Saturday, translated by CNBC.

The government -related body was taking shots in a giant electric company BydWhich raised the latest round of discounts on May 23, including a More than 30 % lower prices On one of its car models.

The association said: “Unbeatable price wars intensify evil competition,” warning of more pressure on profit margins and consumer safety risks. He called on companies to adhere to fair competition and not to monopolize the market or “empty” goods at prices lower than the cost of production.

“Price wars have no winners, a much lower future,” said the official newspaper of the ruling Communist Party of Chinese. Quoted from the Ministry of Industry and Information Technology. This is according to the translation of CNBC for the Chinese.

The report said that the ministry will increase the organization of unproductive competition and cooperation with other departments to enforce laws that enhance fair competition.

The ministry did not immediately respond to a request for comment. BYD CNBC referred to its comment on the Chinese government media, which the auto company said strongly supports the IDE’s calls for fair competition and created a healthy market.

In the past few months, senior Chinese leaders have called for the efforts made to address the engagement. This term was mentioned in the annual action report by Chinese Prime Minister Lee Qiang in March. The market organizer meeting also called last month to “Correcting the “evangelical” competition comprehensively“

Analysts indicated that the latest BYD discounts is in fact the formal character of the discounts that consumers likely to receive in the framework of the support program in China, which aims to enhance consumption.

Despite approximately 30 % on the market, BYD also faces competitive pressure, as Nomura analysts indicated in the Monday report.

The auto industry company, which returned Warren Buffett as an early investor, mentioned, 14 % growth in sales Last month, it slowed the growth of 19 % on an annual basis in April.

“Given the current early situation in the Chinese auto market, we believe that the most intense competitive stage has not yet come, even if we can see the unification of the market in the future in the future.”

Despite the speech, there is not much to do about the market competition, said Chong Xi, an analyst at the Automobile Traders Association in China, said last week. He added that other countries are also watching intense competition in the car market in China and what they might mean for local auto industries.

The average price of the car that was exported from China has decreased since 2023, reflecting a former upward trend, according to the numbers published on social media by the Secretary of the China Dongshu Association.

As for Chinese auto sales to Germany, the average export price per vehicle decreased to 21,000 dollars from this year, a decrease from $ 30,000 in 2023, the data showed. In Mexico, the upper destination for Chinese car exports was an exception, as the average price rose to $ 13,000, up from $ 12,000 two years ago.

In China, the average retail cars was It fell about 19 % Over the past two years to about 165,000 yuan ($ 22,900), according to Nomura, citing industry data from the Autohome Research Institute.

There are other references that the rush to electric cars has created an increase in the width.

” Sina financing interview I was conducted in Mandarin on May 23. He added that about 3000 to 4000 vendors on the Chinese car platforms were selling such cars.

Vehicles were registered as sales or delivery operations for automobile companies, only to sell them in the used market almost immediately, which swallowed sales sizes. But this created “a lot of chaos”, which prompted Wei to invite a better organization inside the industry.

The price war has not yet reached its peak, and “the competition will become more intense in the next five years,” EV start The CEO is Xiaopeng The Chinese media was told last weekThat is investigating the company with CNBC.

“This is just an” appetizer “when it will come. He said that instead of competing for the price, Xpeng will compete for technology and expand beyond China to the rest of the world.

The startup has focused on making its driver assistant system a selling point and has provided more than 30,000 cars per month over the past seven months. Last week, Xpeng released the Mona 03 MAX version in 129,800 ($ 18,020), or nearly 17 % cheaper than when the lower -price model was revealed in August.

Like most of the startups for electric cars, Xpeng reported a loss of contributions in the first quarter of About 90 million dollars. NewWhich focused on more premium vehicles, mentioned on Tuesday Loss of 949.6 million dollars In the first quarter.

However, the Chinese smartphone company Xiaomi On Tuesday, I expected that the work of its electric cars will gain a profit in the second half of the year, and a company spokesman confirmed to CNBC. The company entered the EV market last year with SU7 sedan Cheaper Tesla 3, and the model is expected to take with a Yu7 SUV this summer.