Editors note: The era of US China decoupling has begun.
China plans to place foreign companies considered to have damaged the interests of Chinese companies on an “unreliable entity” list, the country’s commerce ministry said Friday.
[Teng Jing Xuan | May 31, 2019 | CxLive]
The announcement of the list comes after the U.S. Department of Commerceput Chinese telecommunications giant Huawei on its “Entity List,” effectively banning American companies from selling technology to Huawei.
China’s own list, which will also include organizations and individuals, will target entities deemed to have blockaded or cut off Chinese companies from suppliers for non-commercial reasons, Gao Feng, spokesperson of the Ministry of Commerce, said, promising further details soon.
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A previous version of this post incorrectly described the U.S. Department of Commerce action against Huawei.
Cheaper Tesla cars set to hit the Chinese market soon could lure price-sensitive buyers away from traditionally more budget-friendly domestic brands, but local electric-vehicle makers Nio and Xpeng say they aren’t fazed by the change.
Tesla announced Friday that its China-produced Model 3 cars would start at 328,000 yuan ($47,488), 13% cheaper than the imported cars it currently sells in the country. Customers can expect to receive their cars in six to 10 months.
The basic non-imported Model 3 is priced close enough to the mid-range of China’s domestic electric vehicle offerings to snatch some prospective buyers away from local brands, analysts say.
However, Nio and Xpeng, Tesla’s major local competitors, have brushed off the threat from Tesla.
“To be honest, I think the 328,000 yuan China-produced Tesla... has no competitiveness at all. Tesla should have further lowered the price by $10,000,” Xpeng chairman He Xiaopeng said on his WeChat account, adding that Xpeng’s cars were on par with the Tesla Model 3 in terms of battery quality and operating system.
Meanwhile, Nio is confident about its vehicles’ competitiveness even with the cheaper Model 3 in the picture, a company representative told Caixin.
Tesla opened a car factory near Shanghai, its first outside of the U.S., earlier this year. The entry of locally-made Teslas into the Chinese market is set to mitigate some of the effects higher import tariffs have had on the company amid an ongoing trade war.
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