A new price war that started in the Chinese automotive market over the weekend has caused a wide-scale fluctuation in the sector. BYD, one of the world’s biggest names in electric vehicle production, has affected both the market and stock market values with its large-scale price reductions on more than 20 models.
BYD has turned the Chinese market upside down with its huge discounts
The most striking development was the price reduction of the company’s best-selling electric model, Seagull, by 20% to 55,800 yuan, or approximately $7,780. With this discount, BYD took a very aggressive position in the entry-level segment.
The company’s discount decision covered not only entry-level models but also upper-segment hybrid cars. With the 34% discount made on the dual-engine Seal model, the price of the vehicle fell by 53,000 yuan to 102,800 yuan.
This step taken by BYD directly affected its Chinese competitors and ignited a new wave of competition in the sector. The effects on the stock market were also rapid and severe. The company’s shares on the Hong Kong Stock Exchange fell by approximately 9%, while Geely lost 7%, Li Auto lost 5%, and Xpeng lost 4%.
Not only the private sector, but also public automobile manufacturers responded quickly to the price cuts. Changan announced a cash discount of up to 15% on its SUV model offered under the Deepal brand. On the other hand, Leapmotor, backed by Stellantis, discounted its C16 and C11 models by 28% and 30% respectively over the weekend.
China currently leads the world in electric vehicle sales, and approximately 50% of total automobile sales in the country are electric models. The biggest factor in reaching this rate was the cheaper electric vehicle prices thanks to competition.
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