Research on Price Involution and Development of China's New Energy Vehicle Market

This article examines the phenomenon of price volatility in China's new-energy vehicle market and separately analyses the causes and possible consequences in terms of technological innovation and government policies. The Chinese government's policies to promote new energy vehicles, such as subsidies and rapid technological modernisation, have led to high demand for green energy vehicles and a fiercer competitive environment for companies, resulting in a downward price trend in China's new energy vehicle market. Aggressive pricing strategies often come at the expense of profit margins. Continued price declines can lead to fierce competition in China's new energy vehicle market, reducing the living space for small enterprises and reducing the diversity and development potential of the latest energy market. This article identifies the importance of the sustainable development of China's new energy vehicle industry and highlights the need for innovation, differentiation and a stricter policy framework to address the problem of price volatility. The aim is to provide suggestions to the government and the public on how to address the challenges caused by price erosion to promote a healthier and more competitive market environment that drives the growth and technological progress of China's NEV industry.