Beijing warns carmakers: stop killing your profitability hopes by selling below cost
Beijing's new crackdown could kill the era of ultra-cheap electric vehicles.
Deep Dive
China's market regulator has banned carmakers from selling new vehicles below cost, including through discounts or subsidies, effective immediately. The move aims to end a brutal price war that has crushed profitability across the industry. This follows a 7% drop in average car prices and the phasing out of a key EV purchase tax break. Dealers warn the policy may dampen consumer demand and lead to canceled purchases.
Why It Matters
This could signal the end of deep discounts on EVs, potentially raising prices for consumers globally as Chinese automakers focus on margins.