China has vowed to stall the expansion of its electric vehicle industry just as the West braces for a flood of exports to enter the market.
Xin Guobin, the country’s vice-minister of industry and information technology, said Beijing would crack down on “disorderly” competition among electric vehicle (EV) projects from local governments and new carmakers.
Mr Xin warned there was “insufficient” demand from consumers to support the volume of new projects and said Beijing would take “forceful measures” to stop “blind” expansion, the Financial Times reported.
It came as China claimed top spot as the world’s biggest car exporter for the first time. Shipments rose 57.9pc to 4.9 million vehicles, outstripping Japan.
China’s electric car industry has been plunged into a vicious price war as competition heats up and the country seeks to flood western markets with cheap vehicles.
Data from Autotrader this week predicted that one in six EVs sold in the UK by 2030 would be made in China. New electric cars were already facing discounts of more than 10pc from their original price amid increased competition.
Surging electric car exports from China, spearheaded by the manufacturers such as BYD, have sparked a trade war with the EU, with the bloc accusing Beijing of distorting the market with illegal subsidies.
Elsewhere, the US intends to block domestic cars from government tax credits if they contain battery parts made by Chinese firms.
China has attacked the EU for using the “poison” of protectionism to shield domestic car makers. On Friday, Mr Xin accused foreign governments of “abuse” of trade dispute rules.
Matthias Schmidt, founder of Schmidt Automotive Research, said China’s decision to curb some production appeared aimed at “reining in government expenditure and avoiding a siphon going to questionable EV projects”.
He added it would also prevent an “over-capacity production bubble, which is potentially already here”.
Source: finance.yahoo.com