Photo: Tesla_Asia
Tesla and 15 Chinese automakers vowed to steer clear of abnormal pricing and promote “core socialist values” at an industry conference in Shanghai. The move comes just months after Tesla initiated a price war that sent shockwaves through China’s electric-vehicle industry.
The automakers, including Tesla, pledged to contribute to China’s economic growth and to maintain steady growth, bolster confidence, and mitigate risks, reports the Wall Street Journal. This pledge is particularly relevant as China seeks to stimulate consumption in its auto sector to boost its ailing economy.
However, the intensifying price competition in the industry has been disrupting supply chains and endangering the viability of smaller rivals, including NIO and XPeng, both listed in the U.S.
Tesla, the only foreign carmaker to sign the pledge, expressed its commitment to promoting values linked to the Communist Party, a notable move amidst strained U.S.-China relations.
Tesla CEO Elon Musk has a history of expressing support for Beijing. In the past, Musk has praised Chinese authorities and, in 2021, Tesla apologized for its treatment of Chinese customers following accusations by a Chinese Communist Party body of selling defective products and demonstrating arrogance.
Tesla’s biggest consumer market and manufacturing hub outside the U.S. is China, a position encouraged by the Chinese authorities who offered cheap land, low-interest loans, and tax incentives to build its highly successful Giga Shanghai factory. The expectation was that Tesla would trigger consumer demand for EVs, nurture local suppliers, and enhance the performance of Chinese EV manufacturers.
After aggressive price cuts by Tesla led to widespread price slashing and discounts in the market, EV sales began to falter. However, Tesla’s sales in China are rebounding, with over 93,000 cars delivered from its Shanghai plant in June, according to data from the China Passenger Car Association.
At the conference, representatives from various automakers, including NIO, XPeng, SAIC Motor, FAW Group, and Geely, also pledged to prioritize quality and avoid false or exaggerated advertising.