Industrial involution Beijing calls for halt to EV price cutting

Beijing calls for halt to EV price cutting

- Amy Hawkins Helen Davidson

China is urging its electric vehicle industry to stop cutting prices and rein in production amid fears that persistent deflation is imperilling economic growth in the country.

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 problem of more effort and money being invested for diminishing returns. The president, Xi Jinping, has spoken of the problem directly. In an unusually blunt speech this month, he criticised provincial governments for blindly overinvesting in artificial intelligence, computing power and new energy vehicles, industries that Beijing has identified as strategic priorities but which are also at risk of overheating.

Some of China's big car companies, including BYD, the EV maker that is seen as China's rival to Tesla, have been summoned to meetings with regulators to receive warnings about overcapacity.