BYD: Price war on electric cars in China is disastrous for the industry

Chinese company BYD stated that the ongoing price war in the domestic electric vehicle market has reached its limit. According to the company's executive vice president Stella Li, such aggressive competition undermines the industry's stability and forces participants to operate on the edge of survival.

«This is extremely tough competition. We launch a new model on the market, and two months later competitors present a similar but larger vehicle priced 10–20 thousand yuan cheaper,» Li noted.

She emphasized that such a race does not contribute to the industry's development and reduces profit margins for all market participants.

In May, BYD cut prices on 22 models, with some of them becoming more than 30% cheaper. This measure is connected with ambitious plans to increase sales in 2025 to 5.5 million vehicles (30% more than the previous year). According to published data, in the first four months of this year, BYD's sales growth was only 15% compared to the same period last year.

Other car manufacturers such as Chery, Leapmotor, and IM Motors have also started reducing prices on their electric vehicles, causing another wave of concern in the industry. The China Association of Automobile Manufacturers (CAAM) issued a statement calling for the price race to stop, emphasizing that such a practice leads to unhealthy competition and reduces the financial stability of companies.

It is worth noting that BYD's car prices outside China remain stable, which positively affects profits. As noted by company chairman Wang Chuanfu, export sales have become the key growth driver in conditions of unstable domestic competition. Stella Li also stated that the company plans to invest up to 20 billion dollars in Europe over the next few years. Meanwhile, BYD does not consider cooperating with European car manufacturers to create joint ventures, unlike some competitors such as Xpeng and Leapmotor.