BYD faces growing backlash over EV price war as May sales jump
HONG KONG – BYD shares continued their plunge despite monthly sales climbing to the highest in 2025 as the steep discounts the industry uses to entice buyers draws scrutiny from Beijing.
The electric car manufacturer sold 382,476 vehicles last month, including 376,930 passenger cars, according to a statement on June 1. While that marked a high point for 2025, the year-on-year growth of 15 per cent was the slowest since August 2020, except for a drop in deliveries in February 2024 that coincided with a broad slump due to the Lunar New Year holiday.
Despite the sales boost, BYD stock dropped almost 5 per cent in Hong Kong on June 2, which follows a more than 15 per cent slump last week, after a series of reports over the weekend indicated the industry's lengthy price war has caught the attention of the government.
In a commentary on June 1, the People's Daily – the mouthpiece of China's Communist Party – criticized the 'rat-race competition' and warned that price wars can seriously affect supply-chain security. Low-priced and low-quality products would seriously damage the international reputation of 'Made-in-China', it said, without naming any specific companies.
Also over the weekend, China's automobile industry association warned against 'vicious competition' that would hurt profit margins, impair product quality and hinder the healthy development of the industry. The Ministry of Industry and Information Technology agreed with that stance and will step up measures to root out unhealthy competition in in the auto sector and protect market order and consumer rights, media outlet Cailian reported.
BYD has led the bruising price war that's engulfed China's auto industry, hurting profit and clouding the outlook for the fast-growing sector that leads the rest of the world in EV technology.
The latest round of discounting came late last month, when BYD cut prices as much as 34 per cent in a move that was followed by rivals including Zhejiang Leapmotor Technology and Geely Automobile Holdings.
Leapmotor sold 45,067 vehicles in May, up 148 per cent year on year, while Geely Auto's deliveries increased 46 per cent to 235,208 units. Meanwhile Xpeng saw sales triple in May, driven largely by its mass-market MONA M03 model.
Notably, BYD's battery passenger electric vehicle sales of 204,369 topped its plug-in hybrid sales of 172,561, only the second time pure EV sales have been in front since early 2024. The company is also ramping up overseas sales, delivering more than 89,000 units in May, its highest on record.
Analysts at Citigroup estimated that after BYD's discounts, traffic to its dealerships may have surged between 30 per cent to 40 per cent week on week.
So far this year, BYD has sold 1.76 million units against a full-year target of 5.5 million. Morgan Stanley analysts including Tim Hsiao estimate that sales would need to average about 534,000 units per month for the rest of 2025 to reach its goal. The fourth quarter is typically a strong one for all carmakers as they try to move stock before the end of the calendar year. BLOOMBERG
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