Tesla and 16 Chinese automakers signed a truce ending the EV price war. Tesla was the only foreign automaker at the meeting.
Executives from Tesla and 16 China-based automakers participated in a signing ceremony at the China Auto Forum in Shanghai held on July 6, 2023. China’s top car makers took part in the event, including BYD, Geely, and Xpeng Inc. The car manufacturers pledged to avoid abnormal pricing in China and maintain fair competition.
Below are the details from the non-binding agreement the automakers signed.
- Adhere to industry rules and regulations, regulate marketing activities, maintain fair competition, and not disrupt fair competition with abnormal pricing.
- Pay attention to marketing and publicity methods, not exaggerate or use false publicity to attract attention or gain new customers.
- Put quality first; improve lives with high-quality products and services.
- Promote core socialist values, actively fulfill social responsibilities, and take on the heavy responsibility of maintaining steady growth, strengthening confidence, and preventing risks.
The EV price war caused Tesla some trouble as it angered some customers who complained about the company’s ever-changing prices. At one point, customers ransacked a Tesla Experience Center in their anger.
Last month, local Chinese authorities hesitated to approve Tesla’s Giga Shanghai expansion plans. The expansion would increase Tesla China’s production capacity by 450,000 units. However, China’s National Development and Reform Commission (NDRC) were concerned about overcapacity due to the EV price war.
According to Bloomberg, the price war was settling down when the automakers signed the pledge on Thursday.
“The market probably had already expected the end of the price war, as we do see pretty solid EV demand in recent months. Automakers will rely more on new models to lift sales,” said Bloomberg Intelligence analyst Joanna Chen.