- BYD just fired another shot in China’s electric vehicle price war.
- The Tesla rival cut prices on 22 models last week, including its entry-level Seagull EV.
- Shares in Chinese EV makers tumbled on Monday as investors fretted over growing competition in the sector.
China’s EV price war just kicked up a notch — and investors are worried.
Shares in some of Tesla’s biggest Chinese rivals fell sharply on Monday after a raft of price cuts announced by BYD fuelled fears over the country’s brutally competitive EV industry.
BYD stock closed 8.6% lower in Hong Kong, after hitting record highs last week.
Shares in auto conglomerate Geely and pick-up maker Great Wall Motors fell more than 9% and 5% respectively, while EV makers Xpeng, Nio, and Li Auto also posted falls.
The declines follow BYD’s decision last week to cut prices on 22 electric and hybrid models until the end of June.
The discounts included BYD’s already cheap Seagull electric hatchback, which has fallen from 69,800 yuan ($9,700) to 55,800 yuan ($7,750), according to a post on BYD’s Weibo channel.
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China’s EV market is in the grips of a brutal price war sparked by Tesla last year, as some 100 brands fight for a piece of the world’s largest auto market.
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Industry figures have warned that the race to the bottom is not sustainable, with many Chinese EV startups still recording billions of dollars of losses every quarter.
Volkswagen CEO Thomas Schäfer last year called the price war “ruinous” and said it could not last forever, while the boss of Xpeng warned in November that most Chinese car companies will not survive the next 10 years.
BYD’s price cuts come despite its sales booming this year — and not just in China.
The company is on track to sell more than 5 million cars this year, and sold more electric vehicles than Tesla in Europe for the first time in April.
Last week BYD unveiled the Dolphin Surf, the European version of the Seagull. The compact hatchback will go on sale in 15 European markets in June starting at 23,000 euros ($26,000) — about $19,000 less than Tesla’s cheapest model.
