Beijing Says it Will Rein in EV Sector's 'Irrational' Competition

China’s cabinet vowed on Wednesday to contain “irrational” competition in the country’s electric vehicle industry.

State broadcaster CCTV said ministers pledged to boost the monitoring of prices and to increase probes into vehicle costs.

The cabinet meeting, presided over by Chinese Premier Li Qiang, was held as a two-year price war in the world’s largest auto market intensifies.

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China will focus on promoting the high-quality development of the electric vehicle industry and implement comprehensive measures in both the short- and long-term to address the “phenomenon of irrational competition” in the sector, CCTV quoted the cabinet as saying, without giving further details.

The cabinet will also urge the main automakers to fulfil commitments on supplier payment terms and promised to help them boost competitiveness through technological innovation and quality improvement.

Industry regulators and executives have previously warned of excessive competition and called on automakers to halt the bruising price war, which they say threatens the sector’s health and sustainable development.

Concerns about oversupply persist, with new vehicles being shipped overseas as “used” since 2019, according to a report by Reuters in late June.

Separately, the cabinet meeting discussed boosting domestic consumption, with policymakers vowing to systematically remove unreasonable restrictions that hinder household spending and optimise policies for a consumer goods trade-in programme.