In China, manufacturers have entered into an agreement to end competition based on price

16 Chinese automakers unite to end price war in electric car market

Since January, the Chinese market has been under pressure, but an alliance of 16 manufacturers is ending the price war in electric cars.

The Chinese car market: a fierce battle for electric cars

The Chinese market, a giant of more than 25 million cars a year, is seeing intense competition for electric cars emerge. With around 120 builders in attendance, the competition is fierce, with each fighting for survival.

Tesla triggers price war, but other automakers follow

Tesla slashed prices in January, sparking a chain reaction from other automakers. The Model 3 and Y models suffered a steep price drop, prompting even the most reluctant automakers, like Nio, to follow suit. Xpeng recently announced a model starting at very competitive prices.

Small builders struggling amid financial pressure

The current situation jeopardizes the profitability of small manufacturers such as Nio and Xpeng, whose recent financial results have not been satisfactory. The Chinese government has expressed its dissatisfaction through the CAAM and wishes to calm the situation after six months of tension.

An agreement between 16 manufacturers for healthy competition

At the China Auto Forum in Shanghai, 16 automakers signed a joint statement calling for a return to healthy competition with normal pricing. However, this agreement remains a gentleman's agreement and has no legal or binding value.

The commitments of the manufacturers in this agreement

Signatories pledged to abide by industry rules and regulations, avoid deceptive marketing practices, prioritize product and service quality, and fulfill their social responsibility to contribute to national economic growth.

An alliance representative of the Chinese market with an international presence

Manufacturers that have signed the agreement represent a major share of the Chinese market, including FAW, Dongfeng, SAIC, Changan, BAIC, GAC, Sinotruck, Chery, JAC, Geely, Great Wall, BYD, Nio, Li Auto, XPeng. Tesla is the only foreign automaker among the signatories.