According to a report by The Financial Times, Tesla Inc. and other auto manufacturers in China have made a commitment to promote “core socialist values” in response to a directive from the Chinese government. The directive aims to address “reckless” price wars in the auto industry. Chinese rival, BYD, was one of the 16 companies that signed a letter committing to this initiative at an auto industry conference held in Shanghai on Thursday.
Tesla, in particular, has been reducing prices on its electric vehicles (EVs), specifically the more affordable Model 3 and Model Y, multiple times since late last year. This move comes as competition in the EV sector continues to intensify. Despite the challenges, Tesla’s shares are expected to finish the week with over a 6% increase, and the company has seen remarkable overall growth of 127% this year, surpassing the S&P 500 index’s gains of about 15%.
Earlier this week, Tesla announced second-quarter sales that exceeded Wall Street expectations, further solidifying its position in the market.
Overall, this commitment to “core socialist values” reflects the determination of Tesla and other Chinese auto manufacturers to navigate the competitive landscape while aligning themselves with Chinese government guidelines.