{"id":1969063,"date":"2023-07-10T19:23:02","date_gmt":"2023-07-10T23:23:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/explainer-whats-behind-chinas-failed-truce-in-ev-price-war\/"},"modified":"2023-07-10T19:26:50","modified_gmt":"2023-07-10T23:26:50","slug":"explainer-whats-behind-chinas-failed-truce-in-ev-price-war","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/explainer-whats-behind-chinas-failed-truce-in-ev-price-war\/","title":{"rendered":"Why did China&#8217;s EV price war truce fail?"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fexplainer-whats-behind-chinas-failed-truce-in-ev-price-war%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1969063&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<p>(Reuters) -The group representing China\u2019s auto manufacturers has retracted a pledge to avoid \u201cabnormal pricing\u201d that it had brokered between 16 automakers, including Tesla, breaking off a truce in a brutal price war over electric vehicles. <\/p>\n<p>The China Association of Auto Manufacturers (CAAM) said in a statement on Saturday it recognised the agreement had violated China\u2019s antitrust law and would retract it. <\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<h2>WHAT\u2019S THE BACKGROUND HERE?<\/h2>\n<p>Intense competitive pressure: Since January, when Tesla cut prices in China, about two dozen automakers have followed with price cuts of their own to stay competitive and stoke demand.<\/p>\n<p>The list of automakers includes Chinese brands like Xpeng, Geely and its affiliate brands like Volvo, state-owned Chery Automobile, NIO and Great Wall Motor. <\/p>\n<p>Global automakers followed. Ford cut prices on its Mustang Mach E EV. Toyota offered a discount on its bZ4X EV, and Nissan offered an incentive on its Ariya EV. General Motors, Honda, Stellantis, Ford and Nissan also marked down combustion vehicles, which are losing share to EVs and plug-in hybrids.<\/p>\n<p>China\u2019s auto market, the world\u2019s largest, is on track to reach nearly 25 million vehicles in sales this year with overall growth of about 3%, and the share of EVs and plug-ins is rising fast. Consultancy AlixPartners forecasts this will be the first year made-in-China brands top 50% of their home market.<\/p>\n<p>Those changes have created intensifying competition over price and features that is driving sales for EVs but also threatening industry-wide profitability, analysts say.<\/p>\n<p>CAAM in March had urged automakers and local authorities to cool \u201cprice-cut hype\u201d to ensure what it called the stable development of the industry. <\/p>\n<p>Consumers had been waiting for bigger discounts before buying, analysts said, while some auto suppliers have been forced to accept payment cuts.<\/p>\n<h2>WHAT HAPPENED WITH THE \u2018TRUCE\u2019? <\/h2>\n<p>On Thursday, at an event in Shanghai, CAAM brokered a series of commitments signed by executives from 16 automakers. The signatories included industry-leaders in battery vehicles Tesla and BYD, EV-focused Chinese brands NIO, Li Auto and Xpeng, as well as Geely. State-owned brands Chery Automobile, SAIC Motor, GAC Group, Dongfeng Motor and FAW Group also signed.<\/p>\n<p>The signing was witnessed by an official from China\u2019s Ministry of Industry and Information Technology.<\/p>\n<p>The letter included a pledge to \u201cnot disturb fair competition in the market with abnormal pricing\u201d to stabilise the market and promote consumption. That was widely seen as a truce in the price war. <\/p>\n<p>It appeared in doubt just a day later when Tesla said it was offering a referral payout equal to about $500 on its Model 3 and Model Y vehicles, including in China. Volkswagen\u2019s joint ventures with SAIC and FAW also <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/electric-vehicle-maker-rivian-plans-6-percent-workforce-reduction-business-bleeding-cash\/\" title=\"Electric Vehicle Maker Rivian Plans 6 Percent Workforce Reduction, Business Bleeding Cash\">announced price cuts<\/a> in China on their ID-series EVs on Friday. <\/p>\n<p>On Saturday, CAAM retracted the pricing pledge. <\/p>\n<p>Liu Xu, a researcher at the National Strategy Institute of Tsinghua University, said enforcement of antitrust law in China\u2019s auto industry had been selective and that the language of the pricing pledge was so vague it would be hard to determine if it constituted a price monopoly. <\/p>\n<p>While steady price cuts by companies should be allowed, subsidies from local authorities should be removed as they distort the pricing system, Cui Dongshu, secretary general of the China Passenger Car Association, said on Monday.<\/p>\n<h2>WHAT HAPPENS NOW? <\/h2>\n<p>International automakers remain under intense pressure to restructure operations in China, and there are signs the pressure on consumer pricing is feeding back into worker furloughs and lower margins for suppliers. <\/p>\n<p>Some expansion plans are in limbo. Tesla is still awaiting approval for a plan to boost output at its Shanghai plant, its biggest, most productive factory. Some <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/explainer-whats-behind-chinas-failed-truce-in-ev-price-war\/\" title=\"Why did China's EV price war truce fail?\">workers making battery packs<\/a> at Tesla were notified of layoffs at the Shanghai plant last week, although production plans remain unchanged. <\/p>\n<p>Hyundai Motor, the world\u2019s No. 3 global automaker by sales, said last month it would close a plant in China and look to sell it with a factory it shut last year. <\/p>\n<p>AlixPartners said while China\u2019s EV market will continue to grow rapidly, intensifying competition and excess capacity will also drive a shakeout. Only 25 to 30 out of the 167 companies registered to produce EVs or plug-in hybrids in China will survive by 2030, it forecast. <\/p>\n<p>Meanwhile, Chinese brands are targeting growth outside China, including in Europe and Southeast Asia. In one example, Chinese automakers have invested $1.4 billion in Thailand since 2020, now dominating the Thai EV market after taking share from the Japanese brands that have long operated there. <\/p>\n<p> (Reporting by Zhang Yan in Shanghai and Kevin Krolicki in Singapore; Editing by Tom Hogue)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/tech\/explainer-whats-behind-chinas-failed\/attachment\/china-international-fair-for-trade-in-services-ciftis-in-beijing-2\/\"><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/tech\/explainer-whats-behind-chinas-failed\/attachment\/file-photo-cars-drive-on-the-road-during-the-evening-2\/\"><\/a><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>A 14-year-old girl missing for more than three weeks is <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/marine-taken-into-custody-after-missing-teen-found-in-camp-pendleton-barracks\/\" title=\"Marine detained as missing teen discovered in Camp Pendleton barracks.\">safe back home<\/a> after she was found at Camp Pendleton military base north of San Diego. <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>with Braeden Sorbo<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>with Rep. Cory Mills<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>with Karoline Leavitt<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>(Reuters) \u2013 Australia\u2019s competition watchdog on Monday asked consumers, businesses and other relevant stakeholders to provide their views about the business practices\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>(Reuters) -The group representing China\u2019s auto manufacturers has retracted a pledge to avoid \u201cabnormal pricing\u201d that it had brokered between 16 automakers,\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>(Reuters) \u2013 Hospital operator HCA Healthcare said on Monday certain <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/australias-competition-watchdog-puts-data-brokers-on-radar\/\" title=\"Australia's watchdog targets data brokers.\">patient-related information<\/a> had been leaked to an online forum. The leaked data\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>BENGALURU (Reuters) \u2013 Foxconn said on Monday it is pulling out of a joint venture with Vedanta Ltd that was set up\u2026 <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The China Association of Auto Manufacturers (CAAM) has withdrawn its commitment to prevent &#8220;abnormal pricing&#8221; among 16 automakers, including Tesla. This move ends a temporary ceasefire in the fierce electric vehicle price war. CAAM acknowledged the agreement&#8217;s violation in a statement on Saturday.<\/p>\n","protected":false},"author":66,"featured_media":1969064,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-1969063","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1969063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1969063"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1969063\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1969064"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1969063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1969063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1969063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}