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@HDNERChina tackling price wars that takes a toll on its EV industry
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Beijing Targets ‘Disorderly’ Price Wars in Solar and EV Industries
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Beijing has stepped up efforts to curb what it calls “disorderly low-price competition” that has eroded profits across a range of industries. A leading Communist Party publication this week urged tougher regulation of practices such as aggressive discounting and government-backed subsidies that distort market pricing, echoing remarks by President Xi Jinping at a recent top-level economic meeting.
Regulators are moving first against the solar sector. The Ministry of Industry and Information Technology on 4 July summoned executives from 14 photovoltaic companies to discuss quality standards, the elimination of outdated capacity and possible penalties for firms that sell modules below production cost, according to people briefed on the talks and state media reports.
Authorities are also scrutinising the electric-vehicle market, where a prolonged price war has squeezed margins and fuelled overcapacity. Consultancy AlixPartners estimates only 15 of the 129 brands now selling battery-electric and plug-in hybrids in China will remain financially viable by 2030, indicating a wave of consolidation ahead.
Officials say the crackdown aims to shift the economy toward “high-quality development” and reduce deflationary pressures. Industry analysts expect regulators to combine cost-based pricing rules with tighter credit and capacity controls, moves that could reshape competition in two of China’s most strategically important green-technology industries.
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