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BusinessChina EVs

BYD’s price cuts shock China’s EV market, spark fears of price war escalation

BYD offers discounts of 10 to 30 per cent on 22 of its battery-powered and plug-in hybrid models

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A BYD model L at an auto show in Shanghai. Photo: EPA-EFE
Yujie Xuein Hong KongandDaniel Renin Shanghai
BYD’s decision over the weekend to cut prices on 22 models to promote sales has cast a pall over the earnings outlooks of Chinese electric vehicle (EV) makers, as many competitors are expected to follow suit in an effort to retain market share.
BYD’s Hong Kong-listed shares lost 7.5 per cent to close at HK$425.20 on Monday. Xpeng saw its shares close 3.4 per cent lower at HK$75.35, while Li Auto closed 3.2 per cent lower at HK$109.90. And Geely shares fell 6.7 per cent to close at HK$18.38.

On Friday, BYD said that until the end of June it would offer discounts of 10 to more than 30 per cent on 22 of its battery-powered and plug-in hybrid models.

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The latest discounts were mainly focused on models priced under 150,000 yuan (US$20,820). The highest-priced model included in the promotion was the Xia multipurpose vehicle, which remained above 200,000 yuan after a discount of about 13 per cent.

The price of BYD’s cheapest model, the all-electric Seagull hatchback, was reduced 20 per cent to 55,800 yuan from 69,800 yuan. The largest discount was for the Dynasty series Qin Plus DM-i, which saw its sticker price fall 34 per cent to 63,800 yuan from an official guide price of 79,800 yuan.

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Analysts from Morgan Stanley said that “while some of these discounts have been in place since April, the official announcement sends a strong signal” about how tough the market was.

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