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The Industry Department of the National Development and Reform Commission organized a meeting on the management of automobile investment projects, requiring all regions to improve the management of automobile investment projects, prohibit the approval of new investment projects by traditional fuel vehicle production enterprises, and strictly control the expansion of traditional fuel vehicle production capacity by existing automobile enterprises. This will mean that the number of existing traditional fuel vehicle production enterprises will only decrease and not increase.

Regarding the recent actions of the National Development and Reform Commission to "pull the brakes" on the production capacity of the automotive industry, some analysts say that currently, China's automotive industry is scattered, and the profitability of car companies is uneven, resulting in ineffective overcapacity.

It is worth noting that in the field of new energy vehicles, there is a huge increase in domestic power battery production capacity, which may reach 170GWh/year. However, according to the development plan of new energy vehicles in China, this is the goal after 2025. Undoubtedly, with the expansion of power batteries in recent years, the problem of overcapacity in new energy vehicles has become increasingly imminent.

In the opinion of Jia Xinguang, Chief Analyst of China Automotive Industry Consulting and Development Company, the current accurate description of the domestic automotive industry should be "excess ineffective capacity and insufficient effective capacity". The expansion of production capacity in the automotive industry should not be "one size fits all", and strategies can be adopted to limit low-level repetitive construction and support products with competitive potential.

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