Chinese electric vehicle manufacturer BYD has expressed its reaction to the increasingly fierce price competition in the country. Company executive Stella Li stated in an interview that price cuts are putting companies on an unsustainable path.

BYD suffers from competition in the Chinese market

Stella Li said that competition in the market forces them to make continuous discounts. She stated that after a new model is launched on the market, competitors quickly put larger vehicles in the same segment on sale for 10 to 20 thousand yuan less. Li stated that this situation is not healthy, but that they have no other choice to survive under the current conditions.

BYD reduced prices on 22 different models at the end of May. The discount rate exceeded 30 percent for some models. This step is directly related to the company’s sales target of 5.5 million units set for 2025.

However, only a 15 percent increase in sales was achieved in the first four months of the year. This picture shows that the company needs more discounts and more aggressive sales strategies in order to reach its year-end targets.

This wave of discounts initiated by BYD quickly spread to other manufacturers. Brands such as Chery, Leapmotor and IM Motors also made similar price reduction decisions. These developments indicate that the price war that has been going on in the Chinese automotive market for a while will deepen even more.

The ever-increasing competition and decreasing margins have begun to threaten the stability of the sector. The China Automobile Manufacturers Association issued a warning to the sector in general against these developments in a statement it made on May 31.

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