Elon Musk is the Only Foreign Entity to Sign China's Letter to Stop EV Price Competition

Isaiah Richard, Tech Times 07 July 2023, 08:07 pm

A recent motor show in China called upon different car manufacturers present in the country to sign a joint letter, and it got the signature of Tesla CEO Elon Musk pledging his support to the cause. Musk and Tesla are the only foreign entity to sign the letter which calls upon automakers to stop their competition that may lead to an EV price war.

It was known that there were recent price changes in Tesla's EV pricing in the East Asian country, centering on a price hike and reductions made to compete with local brands.

Elon Musk Signed a Chinese Joint Letter as the Only Foreign Entity

(Photo : STR/AFP via Getty Images)

According to a report from the Financial Times, Elon Musk along with 15 other automakers, including Tesla's largest rival in the country, BYD, have all signed a joint letter that calls against the EV price competition. Musk's Tesla is the only foreign entity to sign the paper and adhere to those that call upon these price regulations in the region.

The said letter aligns with the ideals of China's Communist Party, as well as the country's leader, President Xi Jinping.

It happened at a recent auto show over in Shanghai which took place last Thursday, July 6, where the Chinese Ministry of Industry and Information Technology presented a joint letter containing the signatures from other manufacturers.

Tesla Will Abide China's Call to Stop EV Price Competition

Interesting Engineering reported that this letter calls upon the stop of the EV price wars taking place in the country, where different companies match the prices of each other to deter the competition.

It was known that Tesla significantly lowered the selling price of its Model 3 and Model Y, despite it hurting its stocks. With this letter, there would be a somewhat regulation for the prices that would be fair for the industry and consumers alike.

Tesla's Massive Operations in China

Tesla has changed the price of its EVs a lot this year, and the company is varying this on the region it is selling, with a recent price decrease for its clean energy cars in China. However, before that, there are a series of markups and markdowns for its electric cars, with the change beginning as early as January, until the most recent one.

China is not only one of Tesla's most profitable markets but also the location of its prized Gigafactory Shanghai which rapidly manufactures and delivers electric vehicles in the region. Back in 2022, Tesla's Giga Shanghai rolled out its one millionth car manufactured in the plant, but it did not stop there as the company is ramping up its development in the region.

As one of the most important countries for Tesla, China is a highly-regarded nation by Elon Musk, and wants to maintain strong bonds with them for the continued operations and patronage of his company. The recent pledge of the tech CEO only shows how it wants to progress further in the country, joining its goals to avoid EV price wars.