BYD Shares Extend Losses as Price Cuts Throw Spotlight on Sales
(Bloomberg) -- BYD Co. shares extended losses in Hong Kong trading Tuesday — taking their two-day slide to more than 10% — as last week's sweeping price cuts stoked concern of another wave of discounting in China's cutthroat electric car market.
The stock fell as much as 4% in morning trading, following Monday's 8.6% drop. The selloff was sparked after the EV giant announced cuts of as much as 34% on 22 electric and plug-in hybrid models in China until the end of June.
The move came after the company last month posted its slowest year-on-year growth in vehicle deliveries in more than four years. While April sales rose 21% from a year earlier, that was the smallest monthly gain since August 2020, except for a drop in deliveries in February last year, when the Lunar New Year holiday saw nationwide industry sales contract 22%.
Rival Geely Automobile Holdings Ltd.'s compact hatchback Xingyuan last month became the top-selling model in China, overtaking BYD's popular Seagull, according to data from the China Automotive Technology and Research Center.
Morgan Stanley analysts said the price competition sparked by BYD is likely to drag on, with ripple effects into the second half of the year.
What Bloomberg Intelligence says:
BYD's latest price cuts across 22 electric vehicle models highlight its 2025 focus on volume, forcing rivals to deepen discounts or concede sales and market share. China's auto price discounts averaged 15%-16% this year and can potentially increase in 2H, despite government subsidies driving industry growth. - Joanna Chen, autos analyst
The steep price cuts have taken some of the gloss off what has so far been a stellar year for BYD. The stock hit a record high last week, it posted its best month of sales in China and outsold Tesla Inc. in Europe for the first time in April, and raised HK$43.5 billion ($5.5 billion) in a Hong Kong share sale in March.
Before this week's slide, BYD Hong Kong-traded shares had surged almost 75% this year, and with a market value equal to around $158 billion, is bigger than Ford Motor Co., General Motors Co. and Volkswagen AG combined.
On the technology front, it has unveiled a lineup of cars it says can charge in five minutes, and started to make its God's Eye advanced driver-assistance system standard in vehicles priced from 100,000 yuan ($13,900) and include it in several lower-cost models such as the popular Seagull hatchback.
Some of the recently discounted models include those equipped with God's Eye.
Investors will get more insight into how BYD is tracking when monthly sales for May are released on Sunday.
--With assistance from Danny Lee and Chunying Zhang.
More stories like this are available on bloomberg.com
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