The Chinese car group goes back on its promise to avoid “abnormal prices”

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

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

But Elon Musk’s electric vehicle giant Tesla on Friday launched a global program to allow buyers to earn additional incentives through referrals from existing customers, a strategy long used by traditional automakers to boost sales.

In a statement posted on its website on Saturday, CAAM said it recognizes the price commitment violated Chinese antitrust law and said it would remove it from a list of commitments that automakers automobiles had signed, in the presence of an official from the Ministry of Industry and Information Technology.

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

(Reporting by Zhang Yan and Brenda Goh; Editing by William Mallard)

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