Shares of BYD — the Chinese EV giant that overtook Tesla in 2024 — are now falling.
The Hong Kong-listed shares of BYD dropped 8.6% after the company rolled out steep discounts on several of its models. The move has sparked fresh fears of another price war in China’s already competitive EV market.
The decline continued on Tuesday’s Asian session, with BYD shares falling a further 4% in Hong Kong.
Despite the drop, the stock remains up more than 60% year-to-date on the Hong Kong Stock Exchange. In contrast, global competitor Tesla saw little change in its share price on Monday, but remains down 11% year-to-date in 2025.
The sharp stock reaction followed BYD’s announcement of broad price reductions across 22 electric and plug-in hybrid models, effective until 30 June.
The discounts, which range from 10% to 30%, apply to vehicles from its Ocean and Dynasty series. The most significant cut was for the Seal 07 DM-i model, with a discount of 53,000 yuan or 34%.
Analysts expect rival Chinese carmakers to follow BYD’s lead as domestic competition intensifies. The pricing strategy also appears aimed at reducing the excess inventory of older models
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Supporting this view, as reported by CnEVPost, a leading source for electric vehicle news in China, inventory data shows that in the first four months of 2025, BYD’s dealer inventory rose by approximately 150,000 units, equal to around half a month’s worth of retail sales.
Looking ahead, Citi analysts estimate that the price reductions could drive a 30% to 40% weekly surge in sales. This may potentially offset margin pressure.
But according to JATO, a global authority on automotive data, Chinese brands have been instrumental in the growing popularity of electric and hybrid cars and now account for 7.9 percent of the European market.
The BYD, MG, Xpeng and Leapmotor brands saw sales rise 59 percent over the year in electric and hybrid sales, while other manufacturers grew by 26 percent.
Meanwhile, Tesla has struggled to keep pace. The European Automobile Manufacturers’ Association (ACEA) reported that Tesla’s April sales in the EU fell 52.6 percent year-on-year to just 5,475 units, amid growing competition from Chinese players and its ageing range.
Back in its home market, BYD continues to surge ahead of traditional industry heavyweights. European automotive giants have found it increasingly difficult to compete with local Chinese startups in the race to dominate the EV sector.
A new generation of Chinese automotive giants — with BYD at the forefront — has thrived thanks to sustained government support and strategic investment, reshaping the global electric vehicle landscape.
