In a surprising turn of events, the China Association of Auto Manufacturers (CAAM) has withdrawn a pledge made by 16 automakers, including Tesla, Nio, Li Auto, and Xpeng, to abstain from “abnormal pricing”.
The pledge, organized by CAAM and made just two days prior, was seen by some as an indication of a ceasefire in a price war that has been undermining profitability across the industry.
However, Tesla, the electric vehicle (EV) giant led by Elon Musk, launched a global program on Friday that offers additional incentives to buyers through referrals from existing customers. This sales-boosting strategy has been a long-standing practice among traditional automakers.
$TSLA @elonmusk
NEWS: 'No electric vehicle price war' is withdrawn in China🇨🇳– On July 8, the Chinese Automobile Manufacturers Association declared that the above provisions would be deleted because the expression "price" was inappropriate and violated the "anti-monopoly law"… pic.twitter.com/pbaf1bQzQv
— Tsla Chan (@Tslachan) July 8, 2023
In response to this development, CAAM issued a statement on its website on Saturday, acknowledging that the pricing pledge had contravened China’s antitrust law. Consequently, it decided to remove the pledge from a list of commitments that the automakers had signed under the supervision of an official from the Ministry of Industry and Information Technology.
CAAM has pledged to encourage the 16 companies, along with other association members, to strictly adhere to the antitrust law and engage in fair competition through independent pricing.
