BYD, China’s leading electric vehicle (EV) manufacturer, experienced a sharp decline in stock value after unveiling major price reductions across 22 of its EV and hybrid models. The move triggered renewed concerns over a price war in China’s automotive sector, but the company’s robust sales—especially in Europe—continue to position it as a global EV leader, even outpacing Tesla in key international markets.
Stock Dip Raises Investor Concerns
On Monday, BYD’s stock dropped 8.6% following the announcement of sweeping discounts on various models. The decline extended into Tuesday’s Asian markets, falling another 4% in Hong Kong by 5 a.m. CEST. The market reaction reflects worries over shrinking profit margins amid sluggish economic growth in China and intensified U.S.-China trade tensions.
Despite the short-term dip, BYD’s shares remain more than 50% higher year-to-date in Hong Kong, outperforming Tesla, which has seen its stock fall by 13% in 2025.
Price Cuts Across Multiple Models
BYD’s official Weibo page confirmed substantial markdowns on 22 vehicles from its Ocean and Dynasty series, with discounts ranging from 10% to 30%. The most dramatic cut was on the Seal 07 DM-i, which saw a price slash of 53,000 yuan (€6,460)—roughly 34% off its original price. These promotions will run until June 30, 2025.
Industry analysts suggest the pricing strategy serves a dual purpose: countering growing domestic competition and clearing older inventory. BYD’s dealer stock rose by 150,000 units in early 2025—about two weeks’ worth of unsold cars—according to CnEVPost.
Citi analysts project that the price reduction could lead to a 30–40% weekly increase in sales, potentially offsetting the pressure on profit margins.
BYD Surpasses Tesla in Europe
Despite investor jitters, BYD’s global sales momentum remains impressive. In April 2025, the automaker recorded 380,089 new energy vehicle (NEV) sales, up 21% year-on-year, with overseas deliveries hitting new highs for the fifth consecutive month.
Notably, BYD surpassed Tesla in European EV sales for the first time, with 7,231 battery-electric vehicles registered—marking a 169% year-on-year growth. Tesla, meanwhile, saw declines in Europe amid increasing backlash tied to CEO Elon Musk’s political activities.
In Q1 2025, BYD sold nearly 1 million vehicles, keeping it on pace to meet its 5.5 million annual sales target. The company posted a net income of 9.15 billion yuan (€1.11 billion) and maintained a 20% gross profit margin, outperforming Tesla’s $409 million (€359 million) in earnings and 16% margin.
Innovations and Global Expansion Strategy
BYD is enhancing its driver-assistance capabilities through the integration of DeepSeek’s R1 AI platform, seen as a potential challenger to Tesla’s Full Self-Driving (FSD) system—at a lower cost.
In battery production, BYD ranks as China’s second-largest manufacturer behind CATL, giving it a strategic edge in vertical integration and supply chain control.
While the company avoids U.S. passenger vehicle markets, it’s focusing expansion efforts on Southeast Asia, South America, and Europe. A new manufacturing facility in Hungary is expected to boost its European operations significantly.