New moves in place to address woes brought up by disorderly competition

Employees work on a new energy vehicle assembly line in Jinhua, Zhejiang province, in June. HU XIAOFEI/FOR CHINA DAILY

With stronger efforts to rein in disorderly competition among new energy vehicle makers, the sector is expected to further stabilize and prosper, experts said, citing a series of high-level meetings and regulatory moves that had taken place recently to foster fairer market practices and ensure the sector's high-quality and sustainable development.

The State Council's executive meeting on July 16 called for promoting high-quality development of the NEV sector while taking concrete steps to regulate competition among market participants. The next day, the central government held a symposium addressing irrational industry practices.

On Friday, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the State Administration for Market Regulation jointly convened an industry meeting to further advance the campaign for restoring orderly competition.

Zhang Hong, an NEV industry expert at the China Automobile Dealers Association (CADA), said such efforts will help rein in irrational competition and prevent automakers from blindly slashing prices, thereby helping restore market order.

"The strong focus on curbing excessive internal competition aims to improve the innovation ecosystem, promote coordination across the industrial chain, and ensure product quality and overall profitability — all to support the sector's sustainable development."

During the Friday meeting, the regulators further advanced a series of measures aimed at stabilizing the competitive landscape. These include enhanced monitoring of vehicle pricing, stricter oversight of product consistency and quality, and efforts to shorten payment cycles to auto parts suppliers.

Wang Tie, director of automotive strategy and policy research at the China Automotive Technology and Research Center, noted that cost investigations and price monitoring are critical to uncovering unreasonable pricing practices and spotting abnormal fluctuations in a timely manner.

"By deepening cost investigations, regulators can gain a clearer picture of the actual costs involved in NEV production and prevent companies from undercutting prices below cost, which distorts the market. Meanwhile, price monitoring allows authorities to track real-time market changes and respond quickly to any irregularities, guiding prices back toward a rational range."

The MIIT announced in early June that it would launch its 2025 nationwide inspection campaign to examine consistency among NEV manufacturers and their products. Following that, on June 19, the MIIT, SAMR and National Fire and Rescue Administration carried out a joint meeting on strengthening NEV safety management. The meeting emphasized that both automakers and battery manufacturers must properly guide consumers on safe usage, avoid exaggerated or misleading advertising and strictly uphold safety standards.

"The timely release of these initiatives sets a benchmark for regulating business conduct and marketing strategies, while also helping to curb the vicious cycle of price undercutting," said Yan Jinghui, a member of the expert committee of the CADA.

Efforts to shorten payment cycles to suppliers have also gained traction. Following 17 major automakers' pledges to limit payment periods to no more than 60 days, on July 10, the MIIT launched a dedicated reporting channel on the national complaint platform to receive feedback from small and medium-sized enterprises regarding delayed payments or unfulfilled commitments by automakers.

Leading automakers are swiftly moving to align with the policy direction, vowing to focus on quality-oriented growth.

At a meeting on Saturday, Yin Tongyue, chairman of Chery Automobile, said the company would actively implement the directives of the three government agencies, champion fair and orderly competition and promote healthy development within the industry.

Changan Automobile Chairman Zhu Huarong said earlier that with policy guidance, strengthened industry self-regulation and exemplary leadership from top automakers, the country's NEV sector is expected to return to rational, value-driven and sustainable competition within the next one to two years.