The price war on electric cars in China is quickly getting out of control. BYD’s executive president, Stella Li, is saying the EV price war, which it essentially created, is “not sustainable” anymore.
BYD exec says the EV price war is not sustainable
BYD has been all over the news after announcing a new round of price cuts last month on some of its top-selling vehicles.
Some of you may have heard of the Seagull EV, BYD’s top-selling (and most affordable) electric car in China. Although it was already among the cheapest EVs with a starting price tag of around $10,000 (66,800 yuan), it’s now available for under $8,000 (55,800 yuan).
BYD slashed prices on 22 vehicles by up to 34%. The discounts triggered a wave of rivals to follow suit, including Geely and Leapmotor.
The aggressive discounts prompted the China Automobile Manufacturers Association (CAMA) to issue a statement, warning that the lower prices are “triggering a new round of price war panic.”
The organization added that “Disorderly price wars intensify vicious competition, further compressing corporate profit margins.”
BYD’s Li appears to agree. During an interview with Bloomberg this week, Li said that “It’s very extreme, tough competition” in China. BYD’s leader added that the price war is “not sustainable” and that some brands wouldn’t survive.
Li didn’t say if BYD was planning to raise prices. Meanwhile, the company continues to launch low-cost models, undercutting its rivals. BYD launched its new Seal 06 electric sedan earlier this week, starting at just over $15,000 (109,800 yuan), or less than half the cost of a Tesla Model 3 in China.
Even in overseas markets, where BYD is aggressively expanding, it’s offering extremely affordable vehicles. Its new Dolphin Surf, a rebadged version of the Seagull EV, launched as one of the cheapest vehicles in the UK with a starting price of £18,650 (just over $25,000).
BYD has already outsold Tesla in the UK and Europe in monthly registrations. Will the Dolphin Surf’s arrival prompt others in Europe to follow suit? According to analysts, it could actually help drive EV sales.
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