Price War Sparks EV Financial Crisis Concerns In China

2025-06-14 12:01:52

(MENAFN- Asia Times) BYD, the world's largest electric vehicle (EV) manufacturer, is facing growing challenges from an intensifying price war and a change in supplier payment regulations in China, raising market concerns about the company's financial stability.

On May 23, the Shenzhen-based EV maker initiated a price war in China by offering discounts of 10 to 30%. It priced some affordable models under 150,000 yuan (US$20,890), and the Xia MPV (multi-purpose vehicle) at around 200,000 yuan. It also offers its Ocean range's Seagull at a starting price of 55,800 yuan, down from the official guide price of 69,800 yuan.

BYD's Hong Kong-listed shares have fallen by 15.5% from their peak of HK$155 (US$19.7) on May 23. The company's market cap has decreased by some US$22 billion over the period.

BYD executive vice president Stella Li told Bloomberg in an interview on June 12 that the“very extreme, tough competition” in the Chinese EV market is unsustainable.

Li did not say whether BYD would scale back its discount program, but she stated that the company will invest up to $20 billion to expand its operations in Europe over the next few years. She highlighted Germany, the United Kingdom and Italy as BYD's key European markets.

“If we decide to do something, we put all our resources behind it,” she said, referring to the company's commitment to after-sales service in Europe.“We want to ensure it's successful in the long run.”

Last October, the European Union imposed tariffs ranging from 17% to 35.3% on Chinese EVs (BYD: 17%, Geely: 18.8%, SAIC and others: 35.3%). China suggested setting minimum prices for the EVs it ships to the EU. Both sides are still negotiating the matter.

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