The recent decision by BYD to implement substantial price cuts on 22 electric vehicle (EV) models has had significant repercussions for the company's stock performance, resulting in an 8% decline in its share prices on the Hong Kong Stock Exchange. This strategic move, which involved discounts of up to 35%, was largely motivated by a need to stimulate sales amid a backdrop of slowing demand and intensifying competition within China's EV market . The immediate fallout from this decision not only affected BYD but also negatively impacted other Chinese EV manufacturers, indicating a broader concern about market stability and profitability.
The Dynasty series' Qin Plus DM-i is priced from RMB 63,800 for a limited time, down from the official guide price of RMB 79,800.
The discounts for the Dynasty series models do not include the government trade-in subsidies, while the discounts for the Ocean series include the government trade-in subsidies.
According to Deutsche Bank, the promotion is mainly due to the rapid growth of dealer inventories.
In the first four months of 2025, BYD dealer inventories increased by about 150,000 units, equivalent to half a month's retail sales, analyst Wang Bin's team said in a May 24 research note.
BYD sold 1.0 million vehicles in the first quarter, up 60% from a year earlier, beating Tesla to remain the world's top EV seller for the quarter. After the price cut last week, Citi analysts noted that footfall at BYD dealerships surged 30%-40% over the weekend compared with the previous weekend.
Analysts expect BYD's peers to follow in its footsteps. Changan has already announced a cash discount of 25,000 yuan in addition to a replacement subsidy for its Deepal-S07 model.
Analysts have expressed mixed sentiments regarding BYD's aggressive pricing strategy. While UBS analyst Paul Gong raised his price target for BYD due to strong overseas sales potential, the overarching sentiment suggests that the current environment may lead to a price war among competitors . Moreover, as discounts reach unprecedented levels across the industry, with only a few companies remaining profitable, it raises questions about the long-term sustainability of such strategies . In summary, while price cuts may provide short-term relief for sales figures, they could jeopardize profitability and market health in the evolving landscape of electric mobility.
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