China Urges EV Makers to Prioritize Innovation Over Price Wars

Chinese officials have called on electric vehicle manufacturers to shift focus from aggressive discounting to technological innovation and product quality. The directive emerged from a State Council meeting on July 16, where authorities pledged to curb "irrational competition" in the world's largest EV market.

Market regulators will intensify price monitoring and enforce order, though specific measures to support innovation remain undefined. The MOVE aligns with broader Communist Party efforts to stabilize an industry where cutthroat pricing threatens sustainable growth—even as China remains on track to achieve its 5% GDP target for 2025.

Tensions with Western markets loom large in the background. BYD's recent outselling of Tesla in Europe has amplified concerns about Chinese EV exports flooding global markets. Last month saw Beijing summoning industry executives, including BYD leadership, to discourage "unjust" price reductions through self-regulation.