- BYD's Stella Li said China's EV price war is unsustainable and explains why the company cut prices.
- Li also mentioned that BYD plans to continue making significant investments outside China, with a particular focus on the European market.
A senior executive at BYD (HKG: 1211, OTCMKTS: BYDDY) has said that China's electric vehicle (EV) price war is unsustainable and explained why the company recently cut prices.
"It's not sustainable. This is like very extreme, tough competition," BYD executive vice president Stella Li said in an interview with Bloomberg News in London, according to a report today.
BYD's competitors always imitate the company and launch larger models of the same type at lower prices, she said.
"You have to survive, but this is not healthy," she said.
"We launch this model today, and two months later our competitors launch a similar model that is bigger but priced 10,000 to 20,000 RMB cheaper," she said.
In late May, BYD announced price cuts for up to 22 models, with some models seeing price reductions of over 30 percent.
Such an aggressive strategy is primarily due to BYD's ambitious sales targets, with the company aiming to sell 5.5 million vehicles in 2025, representing a year-on-year increase of 30 percent.
However, BYD's retail sales in the first four months of this year grew by only 15 percent year-on-year, Deutsche Bank said in a research note on May 24.
Several automakers, including Chery, Leapmotor (HKG: 9863), and IM Motors, subsequently announced similar measures, sparking concerns about an escalating price war.
On May 31, the China Association of Automobile Manufacturers (CAAM) issued a statement urging an end to the price war in China, stating that disorderly price wars exacerbate unhealthy competition and further squeeze corporate profit margins.
In the interview with Bloomberg, Li also mentioned that BYD plans to continue investing heavily outside China, with a particular focus on the European market.
She said that BYD expects to invest up to $20 billion in Europe over the next few years.
Li also said that BYD currently has no plans to collaborate with European automakers, a strategy adopted by domestic competitors like Xpeng and Leapmotor.
($1 = RMB 7.17)
BYD's prices in overseas markets are relatively stable, which is beneficial to the company's profitability, said Wang Chuanfu.
