(JW Insights) Jul 7 -- US electric vehicle giant Tesla and 15 Chinese carmakers have signed a letter of commitment to maintain market order, following government pressure to end a cut-throat price war this year that has rattled the market, reported Yicai Global on July 6.

The letter, signed at the China Auto Forum held in Shanghai on July 6, stated that car companies will refrain from disturbing fair competition with abnormal prices and maintain order in the car market to create a good environment for consumers.

Besides Tesla, the letter was also signed by the four biggest Chinese state-owned automakers -- SAIC Motor, FAW Group, Dongfeng Group and Changan Auto -- as well as major new energy vehicle players such as BYD, Nio, Li Auto and Xpeng Motors. The China Association of Automobile Manufacturers, the forum’s organizer, also added its name.

In the letter, the automakers also pledged to use appropriate marketing methods that are neither deceptive nor false.

California-based Tesla sparked the price war in China, the world’s biggest auto market, with sharp cuts starting late last year amid weak NEV market demand. By the end of March, more than 40 car brands had lowered prices or offered subsidies, as reported previously by Yicai Global.

The price war appeared to ease in the second quarter. But Deng Chenghao, chief executive of Changan Auto's Deep Blue Auto, told Yicai Global in April that a new round of price cuts would probably come again before long, as competition remains fierce in China's auto market, according to the Yicai Global report.

(Gao J/Yuan XY)