China to curb EV price wars as oversupply sparks industry alarm
The Chinese government is signalling enough is enough when it comes to the fierce competition in the country's electric car market.
China's industrial policy has engineered a remarkable transformation to electric vehicles in what is the world's largest auto market. In so doing, it has spawned far more makers than can possibly survive. Now, long-simmering concerns about oversupply and debilitating price wars are coming to the fore, even as the headline sales numbers soar to new heights.
Market-leader BYD announced this week that its sales grew 31% in the first six months of the year to 2.1 million cars. Nearly half of those were pure electric vehicles and the rest were plug-in hybrids, it said in a Hong Kong Stock Exchange filing. The company phased out internal combustion engine cars in 2022.
BYD came under thinly veiled criticism in late May when it launched a new round of price cuts, and several competitors followed suit. The chairperson of Great Wall Motors warned the industry could come under threat if it continues on the same trajectory.
'When volumes get bigger, it's just much harder to manage and you become the bullseye,' said Lei Xing, an independent analyst who follows the industry.
The government is trying to rein in what is called 'involution' – a term initially applied to the rat race for young people in China and now to companies and industries engaged in meaningless competition that leads nowhere.
BYD has come under criticism for using its dominant position in ways that some consider unfair, sparking price wars that have caused losses across the industry, said Murthy Grandhi, an India-based financial risk analyst at GlobalData.
With the price war in its fourth year, Chinese automakers are looking abroad for profits. BYD's overseas sales more than doubled to 464,000 units in the first half of this year. Worried governments in the U.S. and EU have imposed tariffs on made-in-China electric vehicles, saying that subsidies have given them an unfair advantage.The latest bout of handwringing started when BYD cut the price of more than 20 models on May 23.The same day, the chairman of Great Wall Motors, Wei Jianjun, said he was pessimistic about what he called the 'healthy development' of the EV market. He drew a comparison to Evergrande, the Chinese real estate giant whose collapse sent the entire industry into a downturn from which it has yet to recover.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Qatar Tribune
21 hours ago
- Qatar Tribune
Chinese media says Nvidia H20 AI chips not safe for China
Agencies Nvidia's H20 chips pose security concerns for China, a social media account affiliated with China's state media said on Sunday, after Beijing raised concerns over backdoor access in those chips. The H20 chips are also not technologically advanced or environmentally friendly, the account, Yuyuan Tantian, which is affiliated with state broadcaster CCTV, said in an article published on WeChat. 'When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it,' the article concluded. Nvidia did not immediately respond to a request for comment. H20 artificial intelligence chips were developed by Nvidia for the Chinese market after the US imposed export restrictions on advanced AI chips in late 2023. The administration of US President Donald Trump banned their sales in April amid escalating trade tensions with China, but reversed the ban in July. China's cyberspace watchdog said on July 31 that it had summoned Nvidia to a meeting, asking the US chipmaker to explain whether its H20 chips had any backdoor security risks - a hidden method of bypassing normal authentication or security controls. Nvidia later said its products had no 'backdoors' that would allow remote access or control. In its article, Yuyuan Tantian said Nvidia chips could achieve functions including 'remote shutdown' through a hardware 'backdoor.' Yuyuan Tantian's comment followed criticism against Nvidia by People's Daily, another Chinese state media outlet. In a commentary earlier this month, People's Daily said Nvidia must produce 'convincing security proofs' to eliminate Chinese users' worries over security risks in its chips and regain market trust. China wants the United States to ease export controls on chips critical for artificial intelligence as part of a trade deal before a possible summit between Presidents Donald Trump and Xi Jinping, the Financial Times reported on Sunday. Chinese officials have told experts in Washington that Beijing wants the Trump administration to relax export restrictions on high-bandwidth memory chips, the newspaper reported, citing unnamed people familiar with the matter. The White House, State Department and China's foreign ministry did not immediately respond to requests for comment on the report. HBM chips, which help perform data-intensive AI tasks quickly, are closely watched by investors due to their use alongside AI graphic processors, particularly Nvidia's. The FT said China is concerned because the US HBM controls hamper the ability of Chinese companies such as Huawei to develop their own AI chips. Successive US administrations have curbed exports of advanced chips to China, looking to stymie Beijing's AI and defense development. While this has impacted US firms' ability to fully address booming demand from China, one of the world's largest semiconductor markets, it still remains an important revenue driver for American chipmakers.
Qatar Tribune
21 hours ago
- Qatar Tribune
TCS layoffs herald AI shakeup of $283 bn outsourcing sector
Agencies Indian outsourcing giant Tata Consultancy Services' decision to cut over 12,000 jobs signals the start of a broader AI-fueled trend that could end up eliminating around half a million jobs over the next two to three years from the $283 billion sector, experts said. While TCS pegged the move to shed 2 percent of its workforce to skill mismatches rather than AI-related productivity gains, experts viewed the largest-ever layoffs by India's top private employer as the beginning of things to come in the labor-intensive sector. Roughly 12,200 TCS middle and senior management jobs will be lost. The industry, which has played a crucial role in creating a middle class in India, is increasingly seeing AI being used for everything from basic coding to manual testing and customer support. The sector employed 5.67 million people as of March 2025 and accounted for over 7 percent of India's GDP. It has a huge multiplier effect due to the direct and indirect jobs it creates and the cars-to-homes consumption it drives in the world's fifth-largest economy. It has historically absorbed a majority of India's engineers but that will change as rising AI use ekes out more efficiencies and demands newer skills that many current employees lack, according to half a dozen industry veterans, analysts, and staffing firms. 'We are in the midst of a massive transition that will transform white-collar work as we know it,' said Silicon Valley-based Constellation Research founder and chairman Ray Wang, echoing other experts who warned that more layoffs are likely on the cards. The most vulnerable employees include pure people managers with minimal tech knowledge, those in charge of testing or identifying bugs and ensuring user-friendliness before delivering software to clients, and infrastructure management staff who provide basic tech support and ensure networks and servers are working well, experts said. 'About 400,000 to 500,000 professionals are at risk of being laid off over the next two to three years as their skills don't match client demands,' tech market intelligence firm UnearthInsight's founder Gaurav Vasu said, adding that about 70 percent of those layoffs would impact workers with 4-12 years' experience. 'This (fear stemming from TCS layoffs) may hurt consumer demand for tourism, luxury shopping and even delay long-term investments such as real estate,' Vasu said. TCS and its peers Infosys, HCLTech, Tech Mahindra, Wipro, Mindtree, and Cognizant collectively employ over 430,000 workers with 13 to 25 years of experience, according to staffing firm Xpheno. 'At the moment, they may appear like the big fat middle layer,' Xpheno's co-founder Kamal Karanth said. None of the IT firms responded to Reuters queries seeking comment. 'With cost optimization being the key driver for new deal wins, clients are asking for productivity benefits - a trend which is also growing due to the rise in AI adoption. This requires IT firms to do more work with the same number of employees or the same work with fewer employees,' Jefferies analyst Akshat Agarwal said in a research note. TCS, which had more than 613,000 workers before the layoffs, said in its late July announcement it was gearing up to be 'future-ready' by investing in new technologies, entering new markets, deploying AI at scale for its clients and itself, and realigning its workforce model. It did not answer Reuters queries on how many layoffs were tied to AI adoption and why it could not redeploy the affected employees. 'This is very devastating news,' said a 45-year-old, Kolkata-based TCS employee affected by the latest layoffs. 'It is very difficult for people my age to get new jobs.' Some others who are still at TCS fretted over its mediocre performance bonuses for senior employees in recent quarters, a new 'bench policy' that limits the time somebody could be without a project regardless of personal circumstances or past performance, on-boarding delays, and the emotional turmoil caused by the layoffs. 'All these developments have tanked the morale of mid-career folks like me,' a Pune-based TCS employee said. The Indian outsourcing sector has been a key employment engine since the 1990s, offering upward mobility to millions of engineers. But revenue growth has weakened recently as its clients, stung by inflation and US tariff uncertainty, defer discretionary spending and demand better cost management.
Qatar Tribune
21 hours ago
- Qatar Tribune
US tariff ‘unfair, unjustified, and unreasonable': India
Agencies India faces an ultimatum from the United States with major political and economic ramifications both at home and abroad: end purchases of Russian oil or face painful tariffs. Prime Minister Narendra Modi, leader of the world's most populous nation and its fifth-biggest economy, must make some difficult decisions. US President Donald Trump has given longstanding ally India, one of the world's largest crude oil importers, three weeks to find alternative suppliers. Levies of 25 percent already in place will double to 50 percent if India doesn't strike a deal. For Trump, the August 27 deadline is a bid to strip Moscow of a key source of revenue for its military offensive in Ukraine. 'It is a geopolitical ambush with a 21-day fuse,' said Syed Akbaruddin, a former Indian diplomat to the United Nations, writing in the Times of India newspaper. New Delhi called Washington's move 'unfair, unjustified and unreasonable'. Modi has appeared defiant. He has not spoken directly about Trump but said on Thursday 'India will never compromise' on the interests of its farmers. Agriculture employs vast numbers of people in India and has been a key sticking point in trade negotiations. It all seems a far cry from India's early hopes for special tariff treatment after Trump said in February he had found a 'special bond' with Modi. 'The resilience of US-India relations... is now being tested more than at any other time over the last 20 years,' said Michael Kugelman, from the Asia Pacific Foundation of Canada. Russia accounted for nearly 36 percent of India's total crude oil imports in 2024, snapping up approximately 1.8 million barrels of cut-price Russian crude per day. Buying Russian oil saved India billions of dollars on import costs, keeping domestic fuel prices relatively stable. Switching suppliers will likely threaten price rises, but not doing so will hit India's exports. The Federation of Indian Export Organizations warned that the cost of additional US tariffs risked making many businesses 'not viable'. Urjit Patel, a former central bank governor, said Trump's threats were India's 'worst fears'. Without a deal, 'a needless trade war' would likely ensue and 'welfare loss is certain', he said in a post on social media. Modi has sought to bolster ties with other allies. That includes calling Brazilian President Luiz Inacio Lula da Silva, who said they had agreed on the need 'to defend multilateralism'. Ashok Malik, of business consultancy The Asia Group, told AFP: 'There is a signal there, no question.' India's national security adviser Ajit Doval met with Vladimir Putin in Moscow, saying the dates of a visit to India by the Russian president were 'almost finalized'. Modi, according to Indian media, might also visit China in late August. It would be Modi's first visit since 2018, although it has not been confirmed officially. Beijing's foreign ministry spokesman Guo Jiakun said in response to an AFP question on Friday that 'China welcomes Prime Minister Modi' for the Shanghai Cooperation Organization summit. India and neighboring China have long competed for strategic influence across South Asia. Successive US administrations have seen India as a key partner with like-minded interests when it comes to China. 'All those investments, all that painstaking work done by many US presidents and Indian prime ministers, is being put at risk,' Malik said. 'I have not seen the relationship so troubled since the early 1990s, to be honest. I'm not saying it's all over, not in the least, but it is at risk.' Modi faces a potential domestic backlash if he is seen to bow to Washington. 'India must stand firm, put its national interest first,' the Indian Express newspaper wrote in an editorial. Opposition politicians are watching keenly. Mallikarjun Kharge, president of the key opposition Congress party, warned the government was 'disastrously dithering'. He also pointed to India's longstanding policy of 'non-alignment'. 'Any nation that arbitrarily penalizes India for our time-tested policy of strategic autonomy... doesn't understand the steel frame India is made of,' Kharge said in a statement. However, retired diplomat Akbaruddin said there is still hope. New Delhi can be 'smartly flexible', Akbaruddin said, suggesting that could mean 'buying more US oil if it's priced competitively, or engaging Russia on the ceasefire issue'.
