Automaker Tesla and its main Chinese rivals have agreed to maintain fair competition and avoid overpricing their vehicles in the Chinese market.
Executives representing 16 Chinese companies, including BYD Co, NIO Inc, Xpeng, Geely Automobile Holdings Ltd, and Chery Automobile Co, along with Tesla executives, signed the pricing agreement at the China Automotive Forum in Shanghai.
Tesla began slashing prices of its cars in the Chinese market as early as late 2022. It forced other brands to cut prices as well in early 2023 in order to boost sales.
Currently, demand for electric cars in China is quite sluggish due to the recently lifted COVID-19 quarantine restrictions and expectations of a further drop in car prices. As a result, automakers have to offer large discounts for their products.
At the same time, the Chinese government is seeking to promote EV usage in rural areas. The Ministry of Industry and Information Technology has ordered the China Association of Automobile Manufacturers to bring together 16 companies, which will be bound by an agreement to stabilize market growth and reduce risks.
