BYD Profit Drops as China EV Price War Hits Sales

BYD’s profit falls 30% as fierce price war hits China EV market, despite strong global sales and growing competition from Tesla, Nio, and XPeng.

Shares Drop on Profit Decline

Shares of Chinese EV giant BYD fell up to 8% on Monday. The drop came after the company reported lower profits due to aggressive price competition in China’s car market.

Net Profit Falls 30%

Between April and June, BYD’s net profit fell 30% year-on-year, reaching 6.4 billion yuan ($900 million / £660 million). The company blamed “intense price competition” among local EV brands.

Strong Competition in the Market

BYD competes with domestic rivals Nio and XPeng, and Tesla. All have cut prices to attract buyers. BYD described the market as reaching a “fever pitch.”

Market Disruption Factors

The company pointed to excessive marketing and dealer incentives, like zero-interest loans, as factors disrupting the EV market.

Car Prices in China Decline

Over the past two years, the average car price in China fell by 19%, now around 165,000 yuan ($23,100 / £17,100). Despite strong international sales, BYD’s earnings fell short of analyst expectations.

Global Sales vs. Domestic Pressure

By July, BYD sold 2.49 million vehicles, below its annual target of 5.5 million cars. Experts say even market leaders like BYD cannot easily survive a cut-throat price war.

Long-Term Market Concerns

Prof. Laura Wu from Nanyang Technological University said Beijing’s push to curb discounts is challenging due to an oversaturated EV market. Lower prices help consumers but may cause oversupply.

Analyst View: Still Strong

Judith MacKenzie from Downing Fund Managers said, “BYD’s rapid growth means a temporary profit dip is not alarming. The company remains strong globally.”

BYD’s Global Position

BYD is now the world’s largest EV maker, surpassing Tesla in annual revenue in 2024. Its hybrid vehicles are popular in China, Asia, and Europe.

Key Takeaways:

• BYD profit down 30% due to China EV price war
• Competition from Nio, XPeng, and Tesla is intense
• Average car prices in China fell 19% in 2 years
• Global sales partly offset domestic pressure
• Oversupply and market regulation remain concerns