THE EV BUBBLE CONTINUES TO DEFLATE: Tesla Rival BYD Tumbles After Launching China EV Price War. Several Rivals Fire Back.
BYD is generally viewed as the low-cost producer in China, reflecting its in-house production of batteries and many key components as well as its ability to extract volume discounts from suppliers. So it has more scope to get prices lower than rivals, many of which are not profitable.
Rising inventories at BYD dealers reportedly spurred the automaker’s move, along with a desire to reach 5.5 million in sales this year, up from just over 4 million in 2024.
The EV maker’s discounts don’t apply to its surging overseas sales. Those already tend to have higher margins. That gives BYD another edge over rivals that are almost entirely reliant on the cutthroat China market.
Still, hefty price cuts will likely squeeze BYD’s profit margins.
China price wars are nothing new. Tesla helped kick off big discounts in early 2023, as the U.S. EV giant slashed prices worldwide.
In early 2024, BYD spurred a wave of price cuts.
The market has too many producers and not enough growth, even with mandates and subsidies.