BYD’s Aggressive Price Cuts Trigger Selloff in Chinese EV Stocks

BYD’s latest round of price reductions has sent shockwaves through China’s electric vehicle sector. The automaker slashed prices on 22 models through June 30, including a 20% cut for its Seagull hatchback and 34% for the Seal sedan. This follows earlier reductions of 10-14% on other models in its lineup.

The aggressive pricing strategy sparked a sharp selloff in BYD shares, with Hong Kong-listed stock dropping 6.5% and Shenzhen shares falling nearly 4%. At one point during trading, the Shenzhen shares had plunged over 8%, wiping out recent gains that had pushed the stock to record highs.

Analysts suggest the price war reflects growing inventory pressure across Chinese EV makers as competition intensifies. BYD’s MOVE to sacrifice margins for market share has raised concerns about profitability across the sector, particularly among smaller manufacturers.