BYD shares tanked on Monday, falling from last week's record highs. This was following an announcement that the Chinese electric vehicle (EV) giant was cutting prices on 22 of its electric and hybrid models until the end of June.
The move stoked fears of a further escalation in China's intensifying EV price war, leading to broad declines among rival automakers.
The price reductions, announced on BYD’s official Weibo account, included deep cuts on already low-cost models.
For example, the Seagull hatchback was discounted by 20% to 55,800 yuan (A$11,972), down from 69,800 yuan (A$14,796).
The announcement triggered sharp declines across China's auto sector. BYD shares closed 8.6% lower in Hong Kong.
Meanwhile, Geely shed 9.4%, Great Wall Motors lost 5.5%, Xpeng dipped 4.4%, Nio declined 3%, and Li Auto fell 3.2%.
China's EV market, the world’s largest, remains locked in a cutthroat price battle ignited by Tesla last year. Over 100 domestic brands compete for market share, prompting fears about pricing sustainability.
Industry executives have raised concerns. Volkswagen CEO Thomas Schäfer previously described the ongoing price war as “ruinous”, while Xpeng’s CEO He Xiaopeng warned that most Chinese EV companies are unlikely to survive for the next decade if the current trend persists.
Despite the margin pressure implied by these price cuts, BYD continues to report strong sales momentum. The company is expected to sell over 5 million vehicles this year and, in April, surpassed Tesla in EV sales in Europe for the first time.
Last week, BYD unveiled the Dolphin Surf - the European version of the Seagull - which will launch in 15 European markets in June. With a starting price of €23,000 (A$40,394), it significantly undercuts Tesla’s most affordable model.
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