In the Chinese mainland's new energy vehicle (NEV) market, growth has gone into overdrive: NEVs now make up more than 40% of new car sales. But behind the shiny EVs and soaring delivery numbers, an 'involution' fueled by cutthroat price wars is threatening to stall progress.
On June 5, the China Association of Automobile Manufacturers (CAAM) released a call to action: all automakers must avoid disorderly competition. The CAAM warned that rapid price cuts – triggered by a major carmaker's sharp discount on May 23 and quickly mirrored by rivals – have sent shockwaves through the market.
Continuous investment is essential to support R&D and drive the next wave of EV innovation, the CAAM noted, yet these price battles are squeezing profit margins, undermining service quality and disrupting industrial and supply chains.
Beyond profits, the association cautioned that consumer rights and vehicle safety could be at risk if companies sell below cost or resort to deceptive marketing. It urged leading players to resist monopoly tactics and all firms to conduct self-inspections in line with national laws.
Industry insiders say the next few months will test whether automakers choose collaboration over 'involution'. Steady pricing strategies, investment in brand value and a focus on sustainable growth could help secure the long-term health of the Chinese mainland's NEV sector – and deliver the electric future drivers crave.
Reference(s):
cgtn.com
