One month after Elon Musk met with top Chinese officials, praised the country's technology development, and visited Tesla's Shanghai factory, the world's richest man signed a truce with Chinese automakers to end the yearslong brutal electric vehicle price war.
Musk was among 16 EV company executives who signed the truce to create stability in the world's largest EV market.
The signing event occurred at the China Auto Forum in Shanghai on Thursday. It included execs from China FAW, Dongfeng Motor, SAIC Motor, Changan Automobile, BAIC, GAC, China National Heavy Duty Truck, Chery, JAC, Geely, Great Wall Motor, BYD, NIO, Li Auto, and XPeng Motors. Tesla was the only foreign brand to sign.
Below is an excerpt that outlines the four points to which each automaker has pledged to rein in the price war:
First, we will abide by the rules and regulations of the industry, regulate marketing activities, maintain a fair competition order, and not disrupt the fair competition order of the market with abnormal prices.
Second, we will pay attention to marketing methods, will not exaggerate or conduct false marketing, not to mislead consumers to attract attention and increase customer acquisition.
Third, we will put quality first, use quality-oriented, high-quality products and services to meet the people's needs for a better life.
Fourth, we will actively fulfill our social responsibility, and take an active role in helping to stabilize economic growth, increase confidence and prevent risks, and work together to make a contribution to national economic growth.
The truce follows a yearslong EV price war after Tesla reduced prices on its Model 3 and Model Y last year in the face of rising domestic competition.
Bloomberg noted, "The Ministry of Industry and Information Technology directed the China Association of Automobile Manufacturers to bring the 16 companies together to sign the pact."
Here's the latest EV price discounting by brand:
The price war also unleashed a wave of anger among Tesla customers who "complained at stores and distribution centers, with some even ransacking a so-called Experience Center," Bloomberg said.
Tesla has also slashed prices in the US, unleashing a price war in the second-largest EV market.
