On July 6, Tesla, together with BYD and other Chinese automakers, pledged to maintain fair competition and avoid pricing at "abnormal prices" in China, the world's largest electric vehicle market, in a sign that this year's fierce "price war" in the Chinese market may end.。

Today, under the witness of relevant departments, the China Association of Automobile Manufacturers, together with FAW, Dongfeng, SAIC, Changan, BAIC, GAC, Sinotruk, Chery, Jianghuai, Geely, Great Wall, BYD, Weilai, Ideal, Xiaopeng and Tesla, jointly signed the "Commitment to Maintain Fair Market Order in the Automotive Industry"。

The automobile industry to maintain a fair market order commitment:

In order to maintain a good order in the automobile market, jointly create a good consumption environment, and actively stabilize and promote automobile consumption, we hereby make the following commitments:

First, adhere to the rules and regulations, standardize marketing activities, maintain the order of fair competition, not to disturb the order of fair competition in the market at abnormal prices.。

Second, pay attention to marketing methods and methods, do not exaggerate propaganda, do not false propaganda, do not attract attention, increase the number of customers and misleading propaganda to consumers.。

Third, carry forward the quality first, quality-oriented craftsman spirit, with high-quality products, high-quality service, to meet the needs of the people for a better life

Fourth, carry forward the core values of socialism, actively fulfill their social responsibilities, take an active role in stabilizing growth, strengthening confidence and preventing risks, and work together to make important contributions to national economic growth.。

At the end of last year, Tesla fired the first shot of "price reduction"。At the beginning of the price reduction on the sales of the pull is still more obvious。Just three days after the price cut was announced, Tesla received 30,000 new car orders.。Therefore, in order to increase sales, grab market share, many car companies began to end, have joined the price war.。

Among them, Tesla and BYD are at the forefront in the fierce price war。In March, some models produced at Tesla's Shanghai plant were 14% cheaper than in 2022。After two price cuts, Tesla Model 3 after the price reduction range of 230,000-330,000 yuan, directly against BYD Han; Model Y after the price reduction range of 260,000-360,000 yuan, and BYD Tang head-to-head confrontation.。

But as the ranks of car companies that have joined the "price cuts" have grown, those that have said they will not cut prices have begun to passively announce price cuts.。In the end, the price reduction for the sales of the pull-up effect has been close to nothing, and even some car companies such as Wei Lai, Xiaopeng, ask the world and other sales began to decline.。Many consumers are hesitant because they think there will be a bigger price cut。At the same time, the "side effects" of price cuts began to appear.。For example, Xiaopeng, price cuts squeezed its profit margins, resulting in a 92 year-on-year drop in gross profit in the first quarter..6%, down 84.9%, only 0.700 million yuan; Gross profit margin is only 1.7%, down 10% YoY.5%, down 7% month-on-month。

In this "fight," whether it is a strong old car companies, or young "new car forces," to the end more or less "tired to deal with," in this context, to discuss the "armistice" has become a necessary choice.。

But before the signing of the pledge, there were already signs that the trend was slowing.。Sales began to return to upward momentum in May and June for several automakers, with price cuts less dramatic and, in some cases, price increases.。Shipments at Tesla's Shanghai plant rose nearly 20% year-on-year in June, and deliveries by Chinese automakers such as BYD and Ideal Motors also rose sharply in June.。

Cui Dongshu, secretary-general of the China Passenger Car Market Information Joint Council, said the agreement was reached at a time when the price war had entered a pause。

One analyst said: "The market may have expected the price war to end, as we have indeed seen quite strong demand for electric vehicles in recent months.。"Automakers will rely more on new models to boost sales."。"