Back in May, China’s EV leading company, BYD, triggered a price war when it slashed many of its product prices with one model receiving a discount of about 34%. Several parties in the industry are now expressing their worries.
The People’s Daily, the Chinese Communist Party’s official paper, stated that the competition will not only drain the money from the EV market, but also affect related parties in the auto industry, reducing the workers’ incomes, and create an unsustainable environment.
Meanwhile, Wei Jianjun, high-profile Chairman of Great Wall Motor, stated in an interview that the auto industry may face the same difficulty that China’s property sector is facing, which is currently in a stagnant state.
The China Association of Automobile Manufacturers (CAAM) also made an indirect criticism of BYD and those that followed its action and warned other auto companies not to drop their product prices below their production costs.
Furthermore, the sellers of used cars also express their worries regarding the direction the competition is heading. One seller stated that the many buyers are now deciding to wait.
As for BYD, the EV company stated that Chairman Wei is being alarmist and dismissed his comment. The company also responded to CAAM by pointing to its belief in fair competition.
