BYD Shares Fall as Price War Cuts Into Profits
Chinese electric vehicle giant BYD saw its shares drop by as much as 8% in Hong Kong on Monday after the company reported a sharp decline in quarterly profit, underscoring the toll of intensifying competition in the world’s largest car market.
The Shenzhen-based automaker said net profit for the April–June period fell 30% year-on-year to 6.4 billion yuan ($900 million; £660 million). The decline was attributed to what the company described as “fierce price competition” among domestic EV makers.
BYD, which now ranks as the world’s biggest EV manufacturer by sales, is locked in a battle with local rivals such as Nio and XPeng, as well as US giant Tesla. All have been cutting prices, offering subsidies to dealers, and rolling out zero-interest financing in a bid to win customers.
While BYD’s stock partially recovered from its initial slide, the weak earnings fell short of analysts’ forecasts, who had expected modest growth. Industrial policy expert Laura Wu of Singapore called the results “surprising,” adding that even the industry leader is struggling to benefit from a “cut-throat” price war.
China’s car prices have fallen nearly 20% in two years, now averaging about 165,000 yuan ($23,100; £17,100), according to industry data. The Chinese government has urged automakers to end what it sees as destructive discounting, warning it could harm the broader economy and lead to oversupply.
Despite strong demand overseas, BYD has sold 2.49 million vehicles so far this year, less than half of its 5.5 million annual target. Analysts say the pressure highlights the challenges of sustaining profitability in a sector flooded with players, many of whom entered the market with government support.
BYD overtook Tesla in 2024 as the world’s top EV producer by annual revenue, driven by the popularity of its hybrids across Asia and Europe. But Monday’s trading reflected investor unease, with Wu noting that the stock dip “signals disappointment at earnings that failed to meet expectations.”
