China's Wang Chuanfu Loses $1.8 Billion As Investors Fear EV Price War

Forbes

26-05-2025

A launch event for BYD's Dolphin Surf electric vehicle in Paris on May 21. Such low-priced models have led investors to fear a deeper price war in the industry. The Dolphin Surf will retail for €22,990 ($26,100).
Wang Chuanfu, the billionaire cofounder of Chinese electric vehicle giant BYD, saw his wealth drop by $1.8 billion in a single day after investors were spooked by the company's decision to offer as much as a 34% discount on its already cheaply priced entry-level models.
Wang, the company's 59-year-old chairman and CEO, still has a fortune of $28.3 billion largely based on a BYD stake, according to Forbes estimates. But the company's dual-listed shares plunged as much as 9.2% in Hong Kong and 6.2% in Shenzhen on Monday.
Investors are reacting to the company's Friday announcement of new discounts. In posts made on its website and Chinese social media, the EV behemoth said it would cut the prices of 22 pure electric and plug-in hybrid models until the end of June.
The Seal 07 DM-i, a hybrid sedan with assisted driving features, is the model with the steepest discount. Its price was slashed by 53,000 yuan ($7,400), or 34%, to 102,800 yuan. The Song Plus EV now sells for 117,800 yuan, down more than 20% after price cuts.
Although this isn't the first time BYD has used discounts to sell cars, its latest cuts have triggered fears of a deeper price war in China, analysts say. Since BYD's shares soared over 60% in Hong Kong this year, investors chose to take profit now to evade any impact of the price cuts, Ke Yan, Singapore-based head of research at DZT Research, says by WeChat.
The Chinese EV giant wants to use more aggressive discounts to appeal to price-sensitive consumers, Yale Zhang, Shanghai-based managing director of consultancy Automotive Foresight, says by WeChat. In February, it tried to boost deliveries by adding self-driving functions to models priced below $10,000. That strategy may not have met expectations, he says.
A recent fatal crash involving a Xiaomi electric vehicle has led to rising concerns over smart driving software in general, Zhang notes. To boost sales in China, BYD's home market, direct price cuts might now be the easiest way, he says. The company's 2025 delivery target is 5.5 million vehicles globally.
Analysts say other automakers may have no choice but to follow suit. Amid concerns over more cut-throat competition, shares in auto makers Geely Automobile plunged over 8% in Hong Kong Monday, while shares in Great Wall Motor fell more than 5%.