China's electric vehicle industry faces government pressure to halt price cuts and reduce production due to persistent deflation threats to economic growth. Officials have raised concerns over overcapacity in sectors like EVs, and President Xi Jinping has criticized overinvestment in strategic industries. Recent efforts from government agencies aim to manage supply-side reductions in response to excessive capacity issues affecting the economy. Consumers expect low prices, pushing companies to cut costs in a competitive market, leading to decreased profitability, particularly in the EV sector.
China's electric vehicle industry faces pressure from the government to curb price cuts and production to combat deflation impacting economic growth.
Xi Jinping has criticized excessive investments in artificial intelligence, computing power, and new energy vehicles, warning of overheating in these strategic sectors.
Government agencies in China are responding to Xi's concerns by pledging to implement supply-side reductions to address overcapacity across various industries.
Consumers in China have become accustomed to low prices, leading to companies cutting prices to gain dominance, which has impacted profitability in the EV sector.
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