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As profit margins dwindle in the world’s biggest car market, tensions are rising between major Chinese electric vehicle (EV) manufacturers. The rivalry between Huawei’s smart car unit and BYD has intensified in recent days, with Huawei’s chairman implying that BYD’s success is due to low prices rather than car quality. BYD, which overtook Tesla as the biggest seller of electric vehicles at the end of last year, faces criticism for its pricing strategy. This comes as a result of a price war in China’s hyper-competitive EV industry, where manufacturers are offering deep discounts to attract consumers.

The industry suffered a setback when US President Joe Biden quadrupled tariffs on electric vehicles from China to 100%, effectively closing off a major market. China’s EV industry may also face additional import duties from the European Union. Executives from both Huawei and BYD have engaged in a public exchange, with BYD’s general manager criticizing Huawei for making comparisons at press conferences and forums. The industry’s top players are vying for consumer attention with deep discounts and new models, leading to intense competition in the market.

BYD’s founder and chairman emphasized the company’s core strengths in technology and innovation during its annual shareholder meeting. The company plans to invest $13.8 billion in developing smart EVs, focusing on generative artificial intelligence and large model technologies. BYD was among a group of automakers approved by the Chinese government for public trials of advanced auto driving, showcasing the company’s commitment to innovation and staying ahead in the competitive EV market.

Competition in China’s EV industry has become cutthroat, with over 200 manufacturers facing oversupply and slowing consumer demand. A brutal price war began last year, with manufacturers like BYD and Tesla slashing prices to maintain market positions. Despite increased sales volume due to price cuts and government subsidies, overall profitability has declined. Wang from BYD warned of an impending “brutal elimination round” for the industry, urging companies to establish economies of scale and brand advantages to survive in the competitive market.

The rise of Chinese electric vehicle manufacturers has global implications due to China’s position as the largest EV market in the world. The success of companies like BYD and Huawei can potentially impact market dynamics and competition in the industry. The intense competition and price war in China’s EV market reflect the challenges faced by manufacturers as they navigate regulatory changes, trade tensions, and shifting consumer preferences. As the industry continues to evolve, companies must differentiate themselves through innovation, technology, and value to stay ahead in the competitive landscape.

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