Thursday, November 28, 2024

China vows to curb electric vehicle industry capacity

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The Chinese government has announced it will curb the expansion of the country’s electric vehicle sector as it counters Western criticism of China’s industrial and trade policies, which have contributed to a wave of Chinese car exports.

Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said on Friday that external consumer demand is “insufficient” and that the Chinese government will “Strong measures will be taken,” he said.

“There’s also some disorderly competition,” he said.

The comments came as China’s electric vehicle industry, one of its few economic bright spots, is embroiled in a trade war between China and the West.

The EU launched an anti-dumping investigation into China’s EV industry in September, saying Chinese companies pose an existential threat to German, French and Italian automakers struggling to compete with low-cost high-tech imports. He emphasized his concerns.

The Chinese government hit back this month with an investigation into sales of French cognac to China.

The EU investigation follows accusations that huge subsidies and bank loans from the Chinese government were supporting the expansion of Chinese manufacturing.

European companies are building EV factories far beyond what China needs to meet domestic demand, following a pattern seen in steel, aluminum and solar panel manufacturing, where China has shut out international competition. I am concerned about this.

However, Mr. repeated restrictions.

China overtook Japan last year to become the world’s largest car exporter. This is mainly due to increased sales of internal combustion engine vehicles to Russia and, to a lesser extent, increased sales of Chinese EVs to parts of Asia and Europe. China’s automobile exports increased by more than 60% to nearly 5 million vehicles.

Although Mr.

According to the China Automobile Manufacturers Association, domestic sales of new energy vehicles, including plug-in hybrids and pure battery EVs, increased by more than 38% from the previous year to more than 9 million units in 2023.

While foreign automakers that have been slow to transition to electric vehicles have been hit hardest by intense competition in China, many local companies are also struggling to compete.

“The biggest concern is that the EV market is quickly becoming oversaturated and vicious price competition is on the horizon,” Gavekal Research expert Louis Gabe said in a research note this week.

“With generous bank financing readily available to automakers, the path of least resistance is to cut prices and margins to gain market share and eliminate competition.”



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