A senior executive at China’s Geely showed his support for Great Wall Motor after the company publicly accused BYD of violating national emission standards, in a surprise move that puts BYD under further pressure amid allegations that it abused its leading market position.
“Regarding the well-known allegation that [BYD] used non-pressurized fuel tanks and failed to meet emission standards [with its gas-electric hybrids], people in the industry are well aware of the truth, as many have conducted various teardowns on its vehicles. Our teardown’s result was completely in line with what Great Wall Motor has alleged,” Victor Yang, vice president in charge of public relations and communications at Geely, said publicly on June 7 (our translation).
“There has to be a definitive conclusion about the incident shared with the public. Otherwise, how would the industry be able to embrace self-discipline?” Yang added, in comments made at this year’s China Auto Chongqing Summit in the country’s southwestern municipality of Chongqing. “Geely is against price wars and we must focus on competing on value, technology, quality, service, brand, and our corporate ethics,” the company said on Monday in a statement to TechNode. BYD did not respond to a request for comment.
Why it matters: Yang’s comments come as Chinese regulators recently pledged measures to crack down on “involution-style” competition in the country’s auto market, where most players have been stuck in a price war for at least two years, generating big losses and eroding profits across the industry.
- BYD, already a clear leader in the Chinese auto market, has been accused of indulging in unfair competition with repeated price cuts and by forcing others to follow suit. BYD’s board secretary Li Qian has denied this allegation and said during a shareholder conference on June 6 that the company gives back additional value to customers via technological innovation and improved efficiency, the 21st Century Business Herald reported (in Chinese).
READ MORE: BYD faces strong EV challenge from Geely and Changan in May amid possible regulatory scrutiny
Details: Yang, one of the most outspoken senior executives in the Chinese auto industry, also criticized some companies for chasing the title of king in an “involution-style” competition, warning this could damage the country’s EV ecosystem, which has been nurtured by Beijing’s stimulus efforts. He did not specify names, but called Wei Jianjun, chairman of Great Wall Motor, a “whistleblower” for the industry.
- Yang’s remarks resonated with the audience immediately, as Xiao Yong, head of GAC’s EV Unit Aion, later came up on stage and voiced his support, according to videos circulated on Chinese social media. Earlier, Zhu Huarong, the chairman of Changan Automobile, had spoken out in support of Great Wall Motor, Reuters reported on May 30.
- Li Yunfei, BYD’s general manager of branding and public relations, responded a day later on Chinese microblogging platform Weibo, saying that BYD had complied with regulatory requirements with the adoption of non-pressurized fuel tanks in its hybrid vehicles between 2021 and 2023. He also reiterated that BYD has a healthy balance sheet and no financial issues. The post was later deleted without explanation.
READ MORE: Great Wall Motor’s CEO goes public criticizing BYD over unfair competition
Context: China’s Ministry of Industry and Information Technology announced on Monday that it will increase monitoring of “vehicle models that have attracted significant public attention or present considerable quality and safety risks” and impose penalties on those found to be noncompliant with national standards. This comes after China’s Ministry of Commerce on June 6 promised to fully cooperate with relevant departments to “create a level playing field” in the country’s auto industry.
- The significant decline of lithium carbonate prices, a key material for EV batteries, has created room for cost reduction and price cuts, which is “fairly normal,” Cui Dongshu, secretary general of the China Passenger Car Association, told reporters at an online conference on Monday. Lithium carbonate prices closed at approximately RMB 60,800 ($8,346) per ton on Monday, roughly one-tenth of the level reported by industry consultancy Mysteel Group two years ago.
