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Themis Qi

Julie Zhang

Chinese authorities have renewed their push for stricter oversight of the electric vehicle (EV) market, urging carmakers to move away from aggressive discounting and focus instead on technological innovation.
The directive comes as domestic manufacturers struggle with cooling demand and the phasing out of long-standing government subsidies.
At a high-level meeting on March 17, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the State Administration for Market Regulation, gathered 17 major carmakers to “further regulate the competition order”, in the latest attempt to stabilise a sector defined by a “sticky” and often destructive price war.
Officials vowed to strengthen price monitoring and cost investigations, while urging companies to strictly honour their 60-day payment cycle commitment to suppliers.
According to a February 2026 progress report by the China Association of Automobile Manufacturers, a government-backed industry consortium, the 17 carmakers reduced average payment cycles to 54 days, with four settling in under 50 days.

The extended payment cycle has long been used to cut costs and stay competitive in China’s vast automobile market, but it has squeezed supply-chain profitability even as Beijing has sought to counter deflationary pressures.
The government urged companies to pivot from price-based competition to innovation-led growth, accelerating the development of domestic automotive chips and foundational software to reduce reliance on foreign technology, and speeding up breakthroughs in self-driving systems.
With direct subsidies gone, Beijing has shifted focus to organic demand and global expansion through “trade-in” programmes and the wider application of new-energy heavy trucks.
The vehicle trade-in subsidy scheme was renewed at the end of 2025, offering cash incentives for buyers replacing older vehicles, with higher subsidies for new-energy models.
Authorities also planned policy documents to foster a healthy “car modification” market to unlock untapped consumer potential. To support these efforts, the government aims to enhance financial credit services and international logistics, ensuring smoother pathways for Chinese EV exports and overseas operations.
In the first two months of the year, China sold more than 1.7 million new-energy vehicles, down 7 per cent from a year earlier, as consumers became more budget-conscious after the phasing out of the 10 per cent sales tax exemption.
EV makers including BYD shifted their selling points to supercharging technology and updated intelligent driving systems in recent launches, in addition to speeding up overseas sales.
Sales of EVs in Europe jumped 33 per cent year on year to 4.3 million units in 2025, according to data from London-based minerals research and pricing firm Benchmark Mineral Intelligence.


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Oversight of China’s industry intensifies, with carmakers urged to move beyond discounts and focus on chips and self-driving systems


Oversight of China’s industry intensifies, with carmakers urged to move beyond discounts and focus on chips and self-driving systems.


China presses EV makers to end price war and focus on innovation as demand cools

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Oversight of China’s industry intensifies, with carmakers urged to move beyond discounts and focus on chips and self-driving systems

Oversight of China’s industry intensifies, with carmakers urged to move beyond discounts and focus on chips and self-driving systems