China State Council Plans Oversight of EV Prices and Quality Amid Xi Jinping’s Warning on Overinvestment

China's State Council has announced plans to regulate what it terms 'irrational competition' within the electric vehicle (EV) industry. This move follows a cabinet meeting aimed at reviewing competition dynamics in the sector. Policymakers expressed concern that aggressive price wars and overcapacity could undermine economic growth. To address these issues, three government agencies will be tasked with enhancing oversight of EV prices and quality, as well as monitoring competition within the industry. The government also intends to strengthen cost investigations and price monitoring. This regulatory push comes amid broader concerns about overinvestment in sectors such as EVs and artificial intelligence, a warning recently issued by President Xi Jinping. Investors are closely watching upcoming Politburo meetings for further indications on how Chinese leadership plans to manage hyper-competition not only in EVs but also in related industries like solar power, lithium batteries, and e-commerce.