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China warns EV makers to stop price-cutting to protect the economy
Overcapacity and oversupply are causing ‘involution’ and putting growth at risk, manufacturers told
In recent months Chinese officials have talked repeatedly of the need to combat “ involution ” in sectors suffering from overcapacity, such as EVs, referring to the phenomenon of investing more effort and money for diminishing returns. In an unusually blunt speech this month, China’s president criticised provincial governments for blindly overinvesting in artificial intelligence, in computing power and in new energy vehicles, industries that Beijing has identified as strategic priorities but which are also at risk of overheating. In January, He Xiaopeng, the chief executive of XPeng Motors, reportedly told employees that “the market will definitely see fiercer competition in 2025” and that some auto companies would not survive the looming price war.
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