Shares in Chinese electric vehicle giant BYD dropped by up to 8% on Monday following a sharp decline in quarterly profits, attributed to intensifying price competition in the EV sector. On Friday, the company reported a 30% fall in net profit to 6.4 billion yuan ($900 million) for the April–June quarter compared to the same period last year.
“Increased price competition” among domestic EV brands, including rivals like Nio, XPeng, and Tesla, has significantly impacted the market, BYD said in a filing. The carmaker also cited “industry malpractices” such as “excessive marketing” for market disruption.
Despite slight recovery during Monday trading in Hong Kong, investor sentiment remained cautious. BYD has sold 2.49 million vehicles so far this year, still short of its 2025 target of 5.5 million units.
Average car prices in China have dropped nearly 19% in two years, raising concerns about oversupply. Beijing has urged automakers to stop aggressive discounting to stabilize the economy.
“Even the leader of China’s EV sector won’t necessarily win from a ‘cut-throat’ price war,” said Prof. Laura Wu of Nanyang Technological University. However, Judith Mac Kenzie from Downing Fund Managers noted, “It’s okay to have a bump in the road” after BYD’s meteoric rise.
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