BYD IGNITES CHINA'S EV MARKET WITH DEEP PRICE CUTS,FUELING PRICE WAR FEARS

China’s electric vehicle (EV) market, the world’s largest, is reeling from a seismic move by BYD, the country's top automaker, which slashed prices on 22 of its battery-powered and plug-in hybrid models by 10% to 34% earlier this week.

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Announced on the Chinese social media platform Weibo, the discounts, effective until the end of June, have sent shockwaves through the $4.7 trillion global EV industry, with BYD’s Hong Kong-listed shares dropping 7.5% and competitors like Xpeng, Li Auto, and Geely losing 3.4% to 6.7% in market value.

These cuts signal an escalation of a brutal price war in China's oversupplied auto market, threatening profitability and smaller players’ survival.

The price reductions, targeting models priced under 150,000 yuan ($20,820), aim to boost sales amid slowing demand and intensifying competition, but they risk squeezing suppliers and eroding margins across the sector.

BYD'S STRATEGIC PRICE SLASH

BYD's latest discounts, announced on Weibo, cover 22 models, with significant cuts to popular vehicles like the Seagull hatchback, now priced at 55,800 yuan ($7,780) after a 20% reduction, and the Seal dual-motor hybrid sedan, down 34% to 102,800 yuan.

The promotions, running until June 30, focus on models below 150,000 yuan, though the Xia multipurpose vehicle, discounted 13%, remains above 200,000 yuan. This follows BYD’s earlier cuts in 2025, including an 11.5% reduction for the Sealion 05 DM-i hybrid SUV, aimed at capitalizing on Chinese New Year demand. The strategy builds on BYD’s relentless discounting, which began in February 2024 with 5% to 20% cuts across nearly all models, sparking industry-wide reductions on 195 car models by November 2024, per the China Passenger Car Association (CPCA).