BYD Executive Discusses Unsustainable EV Price War and European Expansion
A senior executive at BYD has recently expressed concerns about the sustainability of China’s electric vehicle (EV) price war and shed light on the company’s decision to slash prices. Stella Li, executive vice president at BYD, emphasized in an interview with Bloomberg News in London that the intense competition in the Chinese EV market is not sustainable in the long run. She highlighted the challenges posed by competitors who imitate BYD’s models and offer larger vehicles at lower prices, creating a price war that ultimately undermines the industry’s health.
Li explained that despite the necessity to stay competitive, the aggressive pricing strategy adopted by BYD and other automakers is not conducive to long-term growth and profitability. In response to the competitive landscape, BYD recently announced substantial price cuts for 22 models, with some vehicles receiving discounts exceeding 30 percent. This move aligns with BYD’s ambitious sales targets, as the company aims to achieve sales of 5.5 million vehicles in 2025, marking a 30 percent increase from the previous year.
While BYD’s retail sales in the first four months of the year grew by 15 percent year-on-year, the company faces pressure to meet its sales targets amidst intensifying competition. Other automakers, including Chery, Leapmotor, and IM Motors, have also followed suit by implementing price reduction strategies, prompting concerns about an escalating price war in the Chinese market.
In light of these developments, the China Association of Automobile Manufacturers (CAAM) issued a statement urging an end to the price war, citing the detrimental impact on competition and corporate profitability. Despite these challenges, BYD remains committed to expanding its presence outside of China, with a particular focus on the European market. Li disclosed that BYD plans to invest up to $20 billion in Europe over the next few years, signaling the company’s strategic growth aspirations in the region.
Unlike some of its competitors who have pursued collaborations with European automakers, BYD has no immediate plans for such partnerships. This independent approach reflects BYD’s confidence in its technological capabilities and brand positioning in the global EV market. As BYD navigates the complexities of the EV landscape and pursues international expansion, the company remains steadfast in its commitment to innovation, sustainability, and delivering high-quality electric vehicles to consumers worldwide.
(Source: Bloomberg News)
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