Gao Feichang, Huo Tingting/Wen

In the first half of 2026, the Chinese automotive industry delivered a mixed report card.

According to data from the China Association of Automobile Manufacturers, the production and sales of new energy vehicles reached 7.438 million and 7.446 million respectively in the first half of the year, an increase of 6.7% and 7.3% year-on-year, respectively. New energy vehicle sales accounted for 49.6% of the total new vehicle sales; During the same period, the export of new energy vehicles was 2.355 million units, a year-on-year increase of 1.2 times.

This set of data is enough to catch the eye of any industrial powerhouse - China's automobile production and sales scale has been ranked first in the world for more than a decade, and the scale of new energy vehicles stands at the top of the global industrial pyramid.

In contrast to the rapid growth in scale, the continuous pressure on profits in the automotive industry. In the first half of 2026, the operating revenue of the automotive industry will be approximately 5.19 trillion yuan, a year-on-year increase of 1.8%; The operating cost is about 4.61 trillion yuan, a year-on-year increase of 2.8%; The total profit is about 195.4 billion yuan, a year-on-year decrease of 20%, with a sales profit margin of only 3.8%. The slight increase in income, rapid rise in costs, and significant decline in profits have created a glaring scissors gap.

This not only reflects the cyclical operating pressure of the automotive industry, but also exposes deep-seated contradictions in the industry's profit model and competitive structure.

China's new energy vehicles have formed significant advantages in battery technology and supply chain costs. The Kirin battery from CATL and the blade battery from BYD have both been industrialized. By 2025, China will account for about 70% of global electric vehicle production, over 80% of global battery cell production, and over 85% and 90% of global production of positive and negative electrode active materials, respectively. On the cost side, under unified vehicle model parameters, the direct manufacturing cost of pure electric vehicles in China is more than 30% lower than that of developed economies. The advantages come from a complete supply chain, large-scale manufacturing, process improvement, automation level, and key material matching.

The scale, technological leadership, and total cost leadership of China's new energy vehicles are among the top in the world, but the profitability of the entire industry continues to decline. If compared horizontally from the perspective of the global automotive industry, China's new energy vehicles are no longer facing simple minor problems, but rather serious distortions in business quality, competition methods, and development models.

Standing at the time point of 2026, the Chinese automotive industry is not facing the question of "whether to develop", but the choice of "how to develop". Is it continuing to drain energy in the quagmire of vicious price wars until profits are exhausted? Or should we shift from quantity based on scale to value regression, and from vicious competition to benign integration?

The answer to this question will determine whether China's new energy vehicle industry can sustainably win the future.

Abnormal Management Quality

In the full fiscal year of 2025, the profit performance of the three representative new energy vehicle companies showed significant differentiation. BYD's net profit attributable to the parent company was 32.619 billion yuan, with a net profit margin of approximately 4.1% calculated based on operating income; Ideal Auto's net profit was 1.139 billion yuan, with a net profit margin of approximately 1.0%; Xiaopeng Motors incurred a net loss of 1.14 billion yuan, corresponding to a net profit margin of approximately -1.5%.

From the perspective of global car companies' operations, Toyota's net profit for the fiscal year 2025 is 4.765 trillion yen (approximately 237.7 billion yuan), a slight decrease of 3.6% year-on-year; Despite a slight decline in net profit, revenue reached a historic high of 48.04 trillion yen, with an operating profit margin of 10%. Even more exaggeratedly, Toyota's annual net profit exceeded the total of 18 Chinese listed car companies.

Data comparison shows that the current sales and scale advantages of Chinese new energy vehicle companies have not yet been widely translated into stable profits, and there is a gap between profit quality and market position.

The profitability of China's new energy vehicles, which does not match the market size, is also reflected in the overall industry chain.

The sales of new energy vehicles have grown rapidly, but the profits of the entire vehicle industry chain have not expanded synchronously, and some links have even fallen into a low profit or loss state. As companies compete for market share through price reductions, operational pressure continues to spread from the vehicle end to upstream and downstream. Vehicle manufacturers often require suppliers to continuously reduce costs and requote in order to maintain sales, R&D investment, and cash flow, while pushing inventory and price volatility risks towards dealers. The problem with China's new energy vehicles is not only low profits for vehicle manufacturers, but also an imbalance in the distribution of benefits and collaborative mechanisms in the industry chain.

From the perspective of the upstream supply chain, suppliers are the first to bear the cost pressure brought about by the reduction in vehicle prices. In June 2025, 17 key car companies promised to "pay within 60 days", and the "Regulations on Ensuring Payment for Small and Medium sized Enterprises" strengthened payment constraints. But the improvement in explicit payment terms does not mean that the pressures of annual cost reduction, bill settlement, and price renegotiation have disappeared.

Industry statistics show that as of the end of the first quarter of 2026, the average turnover days of accounts payable and bills of 18 mainstream listed car companies in China have risen to 216.68 days, far from achieving the "60 day" commitment target, and more than half of the companies have further extended their cycles compared to the end of the previous year.

The automotive parts industry has obvious characteristics of pre investment. Suppliers need to invest in molds, experimental equipment, R&D personnel, and dedicated production lines in advance, and gradually recycle them throughout the lifecycle of the vehicle model; Once the sales of a car model fall short of expectations or the overall price of the vehicle decreases, it becomes difficult to simultaneously reduce fixed costs, equipment depreciation, and labor costs.

In this situation, many suppliers can only maintain orders at lower profits. In the long run, the continuous narrowing of profit margins will compress suppliers' R&D investment and equipment updates, thereby weakening the innovation capability of the upstream automotive industry chain. The prominent problem in China's upstream automotive industry chain is the lack of a stable balance between cost reduction pressure and long-term cooperation and innovation returns.

From the perspective of downstream channels, distributors bear prominent inventory and price risks.

Some Chinese new energy vehicle companies are adopting methods such as rapidly establishing sales networks, increasing sales targets, and binding rebate policies in their expansion, which requires dealers to bear higher inventory pressure; When car companies frequently lower prices, dealers may also face price inversion of new cars and depreciation of existing vehicles.

According to data from the China Automobile Dealers Association, only 23.5% of dealers will achieve profitability in 2025, 55.7% will be in a loss making state, 81.9% will have price inversion, and the gross profit contribution of new car business will be negative; In March 2026, the dealer inventory warning index was 57.5%, still higher than the boom bust line. These data indicate that the sales growth in the automotive market has not synchronized with the improvement of the channel's operating conditions.

Overall, the growth of China's automobile sales has not yet been fully translated into profit growth in various links of the industry chain. Along with the expansion of scale, there are a series of problems such as profit consumption, cost reduction pressure being transferred upstream, and inventory accumulation in downstream channels.

The Jingguan Research Institute believes that when sales growth cannot be converted into common benefits for vehicle manufacturers, suppliers, and channels, the imbalance in business quality is no longer just a financial statement issue, but will further affect the competitive choices of enterprises: the harder it is to obtain stable profits, the easier it is for enterprises to rely on price reductions and short-term sales to maintain growth.

As a result, the abnormality of business quality gradually evolved into the abnormality of competitive philosophy.

Abnormal Competition Concept

Currently, China's new energy vehicles are caught in a vicious price war to gain market share in the domestic market.

Although Li Shufu, Chairman of Geely Holding Group, stated in March 2026 that "we should not engage in price wars, but rather engage in technology wars, quality wars, service wars, brand wars, and ethical wars while maintaining cost and price advantages." However, from BYD to Geely, from scratch to Xiaomi, almost all mainstream domestic car brands have been caught up in the competition based on the core logic of "who is cheaper.

In the first half of 2026, the Chinese passenger car market has already seen a price reduction of 83 models, with an average decrease of about 12% for new energy vehicles. Price reduction has gradually evolved from a phased promotion by individual enterprises to a normalized competition across the entire industry.

The concern about low price competition is not limited to the automotive industry. On August 8, 2026, Zhong Suisui, founder and chairman of Nongfu Spring, stated that what China should be wary of is that companies are "competing on price" but not on quality, high quality, or premium levels, and believe that this competition will harm social productivity. He bluntly stated that the view that "as long as the price is low, the market can be occupied" is a "very immature manifestation of the market economy". This viewpoint also applies to the new energy vehicle industry: if a company mainly relies on price reduction to compete for market share, rather than forming advantages through technology, quality, service, and brand, it may be able to achieve short-term sales growth, but in the long run it may compress profit margins, weaken innovation and brand value accumulation capabilities.

On the other hand, during their heyday of development, German and Japanese car companies relatively restrained their competition in the local market, rarely using large-scale price reductions as their main means, relying more on product iteration and brand premiums to maintain their pricing system, and using their advantages for overseas operations. Taking Toyota as an example, in 1988, when the competition in the Japanese high-end car market intensified, it consolidated its domestic market by upgrading the eighth generation Crown configuration; In the same year, Camry and Corolla were put into production in Kentucky, USA and Canada, promoting localized production in North America. This "internal stability and external expansion" model helps to accumulate stable profits, while domestic car companies rely more on high-frequency price reductions and sales sprints, making the price system and profitability more susceptible to pressure.

In addition to the price war, domestic car companies have also been involved in public opinion debates.

Price wars capture transaction prices, while public opinion wars capture consumer perceptions. When the differences in products and technologies are not sufficient to support competition, companies are more likely to use topics, traffic, or derogatory comments on competitors to influence consumer purchasing judgments, shifting competition from product value to emotional mobilization.

Some companies strengthen marketing tactics such as "best" and "best" through press conferences, live broadcasts, and online communication, and even engage in derogatory remarks and promotions against competitors. In April 2026, Ideal Automobile and Dongfeng Nissan engaged in a public confrontation around the "Internet Water Army" and competing products, which is a typical case. In the cases of online chaos in the automotive industry released by the national cyberspace administration, there were also multiple instances of malicious defamation, false evaluations, and inciting brand users to oppose each other.

Once the public opinion war crosses the normal competition boundary, it may further evolve into issues of advertising compliance, anti unfair competition, and network governance. The key to whether the exaggerated commercial claims of automobile companies are applicable to the Advertising Law lies not in the identity of the speaker, but in whether the relevant content has marketing purposes and is disseminated to unspecified audiences through official accounts, live broadcasts, short videos, and other media interfaces. Once it constitutes an advertisement, absolute terms such as "best" may be subject to legal constraints; Even if it does not constitute advertising, behaviors such as false misleading, malicious defamation, and online trolling may still be subject to anti unfair competition and network governance rules.

Policy governance has begun to address the marketing chaos in the automotive industry. In December 2025, the State Administration for Market Regulation issued a notice on the draft of the "Guidelines for Public Solicitation of Advertising Citation Content Enforcement (Soliciting Opinions)", which clearly regulates and restricts marketing methods such as "eye-catching big characters, exempt small characters from liability" and "promoting internal competition". In March 2026, the State Administration for Market Regulation issued a notice on strengthening the supervision of suggestive language in advertisements, deploying a six-month clean-up and rectification work on related advertising chaos.

The Jingguan Research Institute believes that in the marketing compliance practice of enterprises, it is necessary to further clarify the advertising recognition standards and responsibility boundaries claimed by enterprise executives in press conferences, live broadcasts, and online communication, reduce the space for enterprises to evade marketing compliance responsibilities through "personal opinions", and let competition return more to products, technologies, and services themselves.

The vicious price war in the domestic market is extending to overseas markets. Some Chinese new energy vehicle companies have continued the vicious competition mode in China during their overseas expansion, and the phenomenon of mutual price reduction between Chinese brands in the same overseas market has already occurred. Taking the Thai new energy vehicle market as an example, from 2024 to 2025, Chinese new energy vehicle brands have experienced a concentrated price reduction phenomenon while rapidly expanding their market share.

In the Thai market, some BYD models have caused consumer complaints due to price adjustments, and the subsequent price reductions for related models have reached up to 340000 Thai baht; Great Wall Motors' Ora Cat and GAC Aion brands have also taken promotional and price reduction measures. What is even more alarming is that BYD's significant discounts in Thailand have attracted the attention of local consumers and regulatory authorities. The relevant investigation did not ultimately determine that the discounts violated advertising regulations, but reflected the impact of continuous price reductions on market expectations and consumer trust.

The risk of overseas price wars is not only damaging profits, but also includes the expectation of preservation of value and damage to brand credit. This model of quickly competing for market share through price, although able to expand sales in the short term, may compress overseas profit margins, weaken long-term brand value, and increase trade friction risks.

Chery Holding Group Chairman Yin Tongyue once proposed, "We cannot escalate the price war overseas, let alone slander or undermine each other. We must put more effort into quality, safety, performance, and service

Compared with the overseas competition concept of Chinese car companies, in the 1970s and 1980s, Japanese car companies such as Toyota and Honda entered the North American market relying on the comparative advantage of "lean manufacturing", gradually establishing brand differentiation with core selling points such as fuel economy and quality reliability, rather than relying on low price dumping to win the market.

The development history of the global automotive industry shows that the long-term advantages of overseas competition come from quality, technology, and brand trust, rather than low prices. Chinese car companies going global and simply copying the domestic price competition model will ultimately result in more losses than gains.

Price competition not only affects the development of brands, but also directly transmits pressure to enterprise employees. According to the 2024 financial report, personnel expenses of Volkswagen Group account for approximately 15.3% of sales revenue. According to the 2024 financial reports of major listed passenger car companies, the proportion of labor costs to operating revenue in China's major listed passenger car companies is around 10%.

Chinese car companies, on the premise of already having an overall cost advantage, further establish a competitive advantage through low labor costs, which is inconsistent with the rules commonly used by global car companies.

A competitive philosophy that corresponds to reducing labor costs is' value maximization ', which views people as assets and the engine driving the enterprise forward. In 1914, Ford raised the daily wage of workers from $2.5 to $5, which was once seen as a violation of traditional business common sense. But at that time, the annual turnover rate of Ford employees was as high as 370%, and frequent personnel turnover seriously affected production. Ford believes that raising wages is not simply about increasing costs, but investing in a more stable and efficient workforce, while also empowering workers to become consumers. As a result, within less than a year, Ford's employee turnover rate dropped to 16%, labor productivity increased by 40% to 70%, and the number of reserve recruitment decreased from 53000 to 2000. From 1914 to 1916, Ford Motor Company's profits increased from $30 million to $60 million. High wages result in lower personnel turnover costs, higher efficiency, and stronger competitiveness.

The case of Ford Motor Company illustrates that the production organization and distribution methods of a company are also important variables in its competitiveness. If a company establishes its cost advantage mainly on lowering wages, it may maintain prices and sales in the short term, but in the long run, it will lose its talent competitiveness, weaken skill accumulation, quality stability, and R&D achievement transformation. Once low labor costs evolve into a continuous overdraft of employee abilities and income, it is no longer a sustainable cost advantage. From another perspective, it is also the responsibility of enterprises to increase employee income and drive economic development.

When enterprises do not value profits and sustainable profitability, and cannot achieve structural cost reduction through technological progress, quality management, and operational efficiency, the easiest path to choose is to lower prices, extend payment terms, or reduce long-term investments. Therefore, the price war does not bring about cost reduction in a single link, but rather transmits profit pressure along the industry chain to suppliers, distributors, and employees, at the cost of brand value, innovation capability, and long-term competitiveness.

The Jingguan Research Institute believes that sustained profitability is the core competitiveness of enterprises. Low profits not only affect the long-term development of enterprises, but also the income growth of employees, and indirectly affect the national finance and taxation. At the same time, it is not conducive to the consumption upgrade of the entire society. Once the short-sighted competitive concept solidifies, it will no longer be a simple market strategy, but will evolve into the tragic consequence of bad money driving out good money.

When vicious competition prevails, the problem needs to be further analyzed from the perspective of competition philosophy to the level of industrial system.

The underlying reasons for industrial abnormalities

The competition mode of enterprises is the table, and the design of industrial systems is the inside. In the past few years, local investment promotion, capital financing, and production qualification cooperation have continuously lowered the expansion threshold for enterprises, but there is a lack of clear constraints on after-sales support, data disposal, debt repayment, and supply chain responsibility after business failure. In this situation, enterprises are more likely to pursue scale, sales volume, and market share, while placing profitability and operational quality in secondary positions. To understand why the new energy vehicle industry has fallen into a price war cycle, it is necessary to find answers from the following five aspects.

Firstly, local investment promotion and capacity expansion. In the early stages of the development of the new energy vehicle industry, local governments supported the rapid expansion of new energy vehicle projects through land, industry funds, and infrastructure, but also to some extent weakened the constraints of market demand on production capacity layout, resulting in redundant construction and structural overcapacity.

In 2023, the overall production capacity layout of passenger cars in China has approached 55 million units, with an actual output of about 26 million units. Based on the designed production capacity, the utilization rate is less than 50%; The top 20 domestic passenger car companies have a total production capacity of about 35 million vehicles, with an average utilization rate of less than 50%. In 2024, there will still be over 40 independent new energy vehicle brands with monthly sales of less than 5000 units. Gong Min, head of research for UBS China's automotive industry, stated in November 2024 that there are approximately 10 million outdated and surplus production capacities in the Chinese automotive industry that need to be removed.

This kind of investment incentive that emphasizes project implementation over long-term operation is evident in cases such as Byton Auto. The total investment of Baiteng Nanjing Vehicle Factory exceeds 11 billion yuan, with a planned annual production capacity of 150000 vehicles in the first phase and an overall production capacity of 300000 vehicles. However, before large-scale production, it has stagnated. When the media visited in 2021, the completed factory was basically in a state of silence.

The enterprise's products and business models have not been fully validated, and large-scale production bases are built in advance. Once sales fall short of expectations or financing is interrupted, land, factories, and equipment are difficult to exit or be repurposed, ultimately resulting in idle assets and local disposal pressure. Therefore, the real crux of the industry is not the overall overcapacity of new energy vehicles, but the structural contradiction between the high load expansion of top enterprises and the low utilization and idle capacity of tail enterprises.

Secondly, the mechanism for enterprise exit. In recent years, the new energy vehicle market has experienced a wave of elimination. In June 2025, Hezhong New Energy was ruled by the court to accept bankruptcy reorganization, WM Motor entered pre reorganization in October 2023, and the affiliated company of Huaren Yuntong was ruled to undergo substantive merger reorganization in April 2025.

But unlike ordinary manufacturing enterprises, after the exit of automobile enterprises, there are still many legacy issues such as warranty, parts supply, maintenance outlets, car machine accounts, assisted driving data, remote services, and software upgrades. After the enterprise exits, the real difficulty lies in how to arrange after-sales takeover, data migration, and parts guarantee, to avoid consumers, employees, and suppliers bearing all the costs.

Thirdly, local protection and disposal of existing assets. Behind the difficulty of enterprise exit lies the paradox of local "investment protection". After the suspension of the Sailin Automobile Rugao project, the factory buildings, land, and equipment are subject to judicial disposal; After the shutdown of the Nanjing factory of Baiteng Automobile, its affiliated companies were applied for bankruptcy liquidation. The "total investment" disclosed by the media cannot be directly equated with local fiscal losses, but idle assets, guaranteed debts, industrial fund investments, and employment placement still need to be digested by multiple parties. Therefore, local governments face dual pressures of disposing of existing assets and dealing with industrial aftermath.

Fourth, capital is short-term. Part of the capital is using "burning money for scale" to drive the rapid expansion of loss making enterprises and the fission of multiple brands. When the financing heat decreases, the formed production capacity and organizational costs cannot be withdrawn synchronously. The rhythm of capital "fast in and fast out" does not match the attributes of the automotive industry, such as long cycles, heavy investment, and long return cycles, and can easily amplify the industry's expansion impulse.

Fifth, price and channel supervision. It is not impossible for enterprises to sell below cost price and transfer risks upstream and downstream. The Price Law and the 2026 Compliance Guidelines for Price Behavior in the Automotive Industry have imposed constraints on behaviors such as excluding competitors and selling at prices lower than cost. However, the determination of cost boundaries, promotional subsidies, rebates, and responsibility chains in the automotive industry is still complex. Hidden costs such as supplier payment terms and dealer inventory pressure also need clearer rules to correct them, in order to reduce the further pressure of price competition on the operational quality of various links in the industrial chain.

The Jingguan Research Institute believes that when access is relaxed and exit blockages coexist, when local protection replaces market screening, when short-term capital hijacks long-term industrial logic, and when there is a lack of constraints on dumping pricing and risk transfer, the abnormality of China's automotive industry is no longer the fault of individual enterprises, but a systemic institutional imbalance.

Correcting Industrial Anomalies

The current problems and solutions faced by the automotive industry can be referenced from the historical experience of other industries.

The home appliance industry is a typical industry that has gone from disorderly industrial chaos to benign industrial integration. In the early days, there were numerous home appliance companies with severe product homogenization and fierce price competition. After a long-term market clearance, a large number of enterprises lacking quality, channel, and cost control capabilities have withdrawn, and industry resources have gradually shifted to Haier, Midea, Gree TCL、 Leading enterprises such as Hisense are concentrated, and the market concentration continues to increase. The success of these top home appliance companies is due to the transformation of scale into procurement capabilities, core component capabilities, quality management, channel efficiency, research and development investment, and global business capabilities.

The experience of the home appliance industry shows that industrial integration is not just about reducing the number of enterprises, but also about directing resources towards enterprises with higher efficiency, better products, and more stable operations.

From the perspective of global industrial development history, the integration model of physical industries represented by Rockefeller and the capital restructuring model represented by Morgan have certain reference significance for the resource integration of China's automotive industry. The former emphasizes reducing redundant construction through mergers and acquisitions and industrial chain collaboration, while the latter emphasizes utilizing equity, debt, and long-term capital to address issues such as asset diversification, complex debt, and operational difficulties.

But these two models can only provide ideas and cannot be simply copied. Industrial integration cannot become an unlimited expansion of top enterprises, nor can it be directly designated by the government and capital as market winners. More importantly, it is necessary to reconfigure brand, technology, production capacity, and supply chain resources through market-oriented means.

At present, domestic automobile companies have begun to explore similar integration. After Geely released the "Taizhou Declaration" in 2024, it proposed to reduce duplicate investment and improve resource utilization efficiency. Subsequently, it promoted the integration of Jike and Lynk&Co, and further promoted the integration of Geely Automobile and Jike to strengthen the synergy of technology, products, supply chain, and manufacturing resources. China Changan Automobile is also strengthening resource collaboration among Changan Automobile, Shenlan Automobile, and Avita after completing the group restructuring, and increasing the degree of sharing in research and development, components, manufacturing, marketing, and overseas channels.

These practices have shown that industrial integration is not just about "who acquires whom", but more importantly, reducing redundant construction, improving resource utilization efficiency, and forming technological and scale synergy while maintaining brand differentiation.

The Jingguan Research Institute believes that the next step for China's automotive industry should be to coordinate with the market, enterprises, and government to gradually move the entire industry towards a healthy development track.

Firstly, to truly clear the market, enterprises that suffer long-term losses, lack competitiveness, and have no reasonable prospects for recovery should be legally bankrupted, restructured, or acquired.

Secondly, promote independent integration of enterprises, integrate technology, production lines, supply chains, and channels through market-oriented mergers and acquisitions, equity adjustments, and debt restructuring, and eliminate duplicate platforms and inefficient production capacity.

Thirdly, the government should return to rule making and public services, break local protectionism, improve exit and bankruptcy reorganization mechanisms, and protect the rights and interests of consumers and suppliers.

Industrial funds and long-term capital can participate in restructuring, but funds should be allocated based on technological value, asset efficiency, and market prospects. Ultimately, an industrial governance pattern will be formed where the market is responsible for clearing, enterprises are responsible for integration, and the government is responsible for rules.

Conclusion

Looking at the development history of various manufacturing industries around the world, vicious price wars are always short-sighted competitive methods that overdraw profits, consume technology, and destroy brands. No industry can rely on low prices to sustain high-quality development in the long run.

In the late 1990s, Chinese motorcycles entered Vietnam with low prices and their market share increased to 80% in just a few years. Subsequently, the price war caused the export price of bicycles to plummet from the initial $600 to $800, reaching a low of $200 in 2001; By around 2002, the highest profit from selling a motorcycle was only about 30 yuan, and China's motorcycle exports also significantly declined, losing the market it had seized through price wars. Japanese brands rely on new product development to regain market share.

Extending our gaze to the century old automotive industry, the same historical cycle has already unfolded. In the early years, the US automotive industry had absolute global dominance, with production capacity, industrial scale, and market penetration surpassing German and Japanese car companies of the same period, giving it a first mover advantage. Although American car companies have been impacted by multiple factors such as the oil crisis, product structure, quality management, labor costs, and international competition, the main reason is that some American car companies have been engaged in vicious price wars in the domestic market for a long time, leading to the gradual disappearance of their competitive advantage and ultimately losing competitiveness in the global car market.

In contrast to American car companies, German and Japanese car companies, which were at a critical stage of development, avoided vicious price wars in their domestic markets, adhered to the value competition route, and eventually surpassed the United States, gradually gaining an advantage in the global market.

Nowadays, China's new energy vehicles have the same advantage globally as American cars did back then. If they continue to engage in vicious price wars domestically, they are likely to follow in the footsteps of the American automotive industry, ultimately losing competitiveness and leading position in the global automotive market.

The Chinese automotive industry must completely bid farewell to vicious price wars in order to win the future and achieve long-term development. Through market-oriented integration, complete capacity clearance, asset restructuring, and brand optimization, eliminate inefficient and outdated production capacity and existing entities, and concentrate limited industrial resources to empower high-quality enterprises with solid technology, efficient operation, and brand value. Promote the industry to shift from the savage internal competition of "low price volume" to the high-quality development of quality, technology, and brand in parallel, truly building a sustainable global industrial competitiveness.

(The authors of this article are Gao Feichang, a researcher at the Jingguan Research Institute, and Huo Tingting, an assistant researcher.)