BYD, a prominent player in the new energy vehicle (NEV) sector, is reportedly taking measures to prepare for increased competition in 2025. The company is urging its passenger car suppliers to reduce their parts quotes in order to enhance the competitiveness of its vehicles. This move signifies a continuation of the price competition trend in China’s NEV market.
According to a report by Sina Tech, BYD is requesting its suppliers to lower their product quotations by 10 percent starting from January 1, 2025. The company believes that the NEV market will become more competitive in the coming year, and in order to stay ahead, cost-cutting measures need to be implemented throughout the supply chain.
Suppliers have been given a deadline of December 15 to submit their revised offers after identifying areas where costs can be reduced. While BYD has not officially confirmed the authenticity of the internal email circulating on Chinese social media, the document highlights the company’s impressive sales performance.
BYD has experienced significant sales growth, with over 3.25 million units sold from January to October and a projected total of 4.2 million units by the end of the year. This success has been attributed to technological innovation, scale advantages, and a low-cost supply chain.
In October alone, BYD sold over 502,000 NEVs, marking a milestone for the company. The consistent growth in sales has prompted BYD to expand its production capacity, adding nearly 200,000 units from August to October. This capacity increase is expected to support the company’s ambitious sales targets for the upcoming year.
The decision to reduce parts quotes aligns with BYD’s strategy to maintain its competitive edge in the NEV market. This move comes in the wake of Tesla’s recent announcement offering discounts on certain models in China, indicating a trend towards price competition within the industry.
Overall, BYD’s proactive approach to cost reduction underscores the company’s commitment to staying ahead in the rapidly evolving NEV sector. As competition intensifies, players in the market will need to continuously innovate and streamline their operations to meet the demands of discerning consumers.
