China exported 8.32 million vehicles last year and is now aiming for stable pricing on those sales.

      China's ministries of commerce and industry, along with its market regulator, have jointly issued guidelines instructing automakers to determine overseas prices based on costs and market demand, establish clear pricing tiers, and avoid frequent drastic changes. Meanwhile, the European Union has been working for two years to replace its countervailing duties on Chinese electric vehicles with a negotiated minimum import price.

      China has instructed its car manufacturers to refrain from competing on price in foreign markets. According to Semafor, three government agencies released joint guidelines for international expansion.

      The guidelines' language is notably precise, advising manufacturers to price according to costs and market demands, set distinct tiers based on vehicle configurations, avoid frequent large price fluctuations, and respect the pricing autonomy of local dealers.

      The issuers clarify the target audience for these guidelines. The commerce and industry ministries, along with the market regulator, released this as general advice, as reported by CnEVPost.

      The significant volumes involved illustrate the concern behind these measures. In 2025, China exported 8.32 million vehicles, including 2.77 million new energy passenger cars in the first seven months of this year, with total passenger vehicle exports during that period reaching about 5.18 million.

      The focus of these guidelines is primarily on the European market. In October 2024, the EU enacted definitive countervailing duties on Chinese battery electric vehicles, ranging from 7.8% to 35.3%, in addition to the standard 10% import duty.

      Brussels has been attempting to replace these duties ever since, with the proposed alternative being a negotiated minimum import price rather than an imposed tariff. In January, the Commission outlined its conditions, including aspects like minimum pricing, sales channels, cross-compensation, and future investments in the EU.

      Beijing has now introduced similar guidelines, advocating for cost-based pricing, defined tiers, and a prohibition on disruptive undercutting, established in Beijing rather than through negotiations in Brussels.

      The internal politics within the EU have not been fully resolved either. TNW reported that Germany and Hungary opposed the tariffs when they were put in place, likely influenced by their investment ties to China. Hungary hosts BYD’s European plant, and German car manufacturers have significant sales in the Chinese market.

      The market dynamics have progressed irrespective of these political considerations. By July, the share of electric vehicles in Europe reached 25%, with sales increasing by 51%.

      The guidelines do not specify any penalties for non-compliance; they merely encourage adherence to local laws and international regulations while not indicating the consequences for disregard. Additionally, the guidance addresses after-sales services, labor protections, and connected vehicle data.

      This poses a challenge for Brussels. A price floor that it cannot enforce differs from one that can be negotiated, and BYD has already commenced production within the tariff framework at its Szeged factory.