China’s auto group retracts pledge to avoid ‘abnormal pricing’

SHANGHAI (Reuters) – The China Association of Auto Manufacturers (CAAM), citing antitrust law, on Saturday retracted a pledge to avoid “abnormal pricing” made two days earlier by 16 automakers, including Tesla (NASDAQ:)..

Thursday’s CAAM-organised pledge by the companies, including Chinese electric vehicle (EV) makers Nio (NYSE:), Li Auto and Xpeng (NYSE:), had been interpreted by some as signalling a truce in a price war that has threatened industry-wide profitability.

But Elon Musk’s EV giant Tesla on Friday rolled out a global programme letting buyers get extra incentives through referrals from existing customers, a strategy long used by traditional automakers to boost sales.

In a statement on its website on Saturday, CAAM said it recognised the pricing pledge had violated China’s antitrust law and said it would delete it from a list of commitments the automakers had signed, witnessed by an official from Ministry of Industry and Information Technology.

CAAM said it would urge the 16 companies and other association members to strictly comply with the antitrust law and compete fairly with independent pricing.