CATL boss Robin Zeng urges China’s EV makers to stop cutting prices and focus on reliability

Name: SCMP
Telephone: +852-2680-8888

Zeng is the latest business leader to criticise the cutthroat competition amid worries that constant price reductions are undermining profitability, reputation and even safety

Reading Time:2 minutes

Why you can trust SCMP

‘A one-off price competition is not desirable.’ says Zeng, pictured here at the World Economic Forum in Davos, Switzerland, in January. Photo: Bloomberg

Daniel Renin Shanghai

Published: 4:58pm, 25 Jun 2024Updated: 5:54pm, 25 Jun 2024

Robin Zeng, the founder and chairman of Contemporary Amperex Technology Ltd (CATL), has urged Chinese electric vehicle (EV) builders and car component manufacturers to cease the price war engulfing the sector and focus on ensuring the reliability of their products.

Speaking at the 15th Annual Meeting of the New Champions, also known as the Summer Davos, the boss of the world’s largest EV battery maker joined the chorus of recent voices warning that such intense price competition may come at the cost of safety, as well as profitability.

“Competition in the [EV] industry should pit players against each other in terms of technology, long-term value, sustainability as well as safety and reliability,” he said on Tuesday at the forum, which is being held in the northeastern city of Dalian. “A one-off price competition is not desirable. After all, it is a race throughout the products’ life cycle.”

Zeng, 56, is the latest influential business leader to criticise the cutthroat competition in the mainland’s electric car industry, one of the few bright spots in the Chinese economy, amid mounting worries that constant price reductions could ensnare even the likes of BYD, the world’s bestselling EV maker.

In April, Goldman Sachs forecast in a research report that if BYD were to slice another 10,300 yuan (US$1,418) off the price of each of its vehicles, the overall profitability of the country’s EV industry would turn negative in 2024.

12:53

‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market

Last week, David Xu Daquan, president of Bosch China, told reporters in a media briefing that the escalating price war would not only hurt mainland carmakers’ profitability but also dent their stature as global industry leaders.