BYD’s Bold Price Slash Ignites China’s EV Market Turmoil, Stocks Plummet

BYD Co., China’s leading electric vehicle (EV) manufacturer, caused shocks throughout the industry on Monday, as its stock dropped 8.3% in Hong Kong trading following aggressive price cuts of up to 34% on 22 electric and plug-in hybrid models.

The move, aimed at clearing inventory and stimulating demand in a slowing market, dragged down shares of competitors like Geely Automobile Holdings Ltd. (down 9.46%), Great Wall Motor Co. (down 5.52%), and Li Auto Inc. (down 0.84%).

With China’s EV sector grappling with 3.5 million vehicles in dealership inventory, the highest since December 2023, the price reductions signal a renewed price war that could reshape the industry.

Price Cuts Fuel Competitive Firestorm

BYD’s discounts, effective until June 30, include a 20% reduction on its Seagull hatchback, now priced at 55,800 yuan ($7,780), and a 34% cut on the Seal dual-motor hybrid sedan, now 102,800 yuan.

These moves target older models lacking advanced driver-assist features, which BYD began offering for free in February. The China Passenger Car Association reports that dealership inventory reached 57 days last month, reflecting sluggish consumer demand amid China’s economic challenges.

Real-time market data indicates that BYD’s pricing strategy has already boosted dealership traffic by 30-40% week-on-week, potentially sustaining its record-breaking April sales for 2025.

Did You Know?
BYD’s Blade Battery technology, used in its EVs, offers enhanced safety and energy density, contributing to its competitive edge in cost and performance.

Rivals Feel the Heat, Margins Under Pressure

The ripple effects of BYD’s pricing strategy are forcing competitors to respond. Chongqing Changan Automobile Co. recently announced a 25,000-yuan discount on its Deepal S07 model, while Zhejiang Leapmotor Technologies Ltd. lowered prices for its C16 and C11 SUVs.

Analysts at Citi Research predict that these countermoves will deepen financial strain, with smaller automakers facing mounting losses and potential consolidation.

Morgan Stanley analysts noted that BYD’s formal announcement highlights the “tough end market,” with rival margins, already as low as 5% for some, at risk of further erosion.

ALSO READ | Xiaomi’s Xring O1 Chip Challenges Apple’s Dominance with Budget-Friendly Power

BYD’s Global Gains Amid Domestic Challenges

Despite domestic headwinds, BYD remains a powerhouse. The company posted its strongest sales month of 2025 in April and is on track to meet its 5.5 million vehicle delivery target.

Internationally, BYD outpaced Tesla Inc. in Europe’s EV market last month, leveraging its vertically integrated supply chain, which includes in-house battery and semiconductor production.

Data shows BYD’s first-quarter gross margin at 20%, surpassing Tesla’s 16%, with net income soaring to 9.15 billion yuan. While its stock has risen 10% year-to-date, peers like Geely lag, down 4% in the same period.