Tesla and BYD are gearing up for another round in China's brutal EV battle

Core Insights - The ongoing price war in China's electric vehicle (EV) market, primarily between BYD and Tesla, shows no signs of abating, with both companies pushing for lower prices to maintain competitiveness [1][2][4] Company Strategies - BYD is reportedly asking suppliers to reduce prices by 10% as part of its annual negotiations, which is a common practice in the automotive industry [3][4] - Tesla has cut the price of its Model Y EV in China by 10,000 yuan (approximately $1,400) to boost sales amid increasing competition [5] - Both companies are responding to market pressures from smaller rivals like Zeekr and Xpeng, which have introduced competitive models this year [6] Market Dynamics - The price war has led to significant price reductions in the EV market, with some vehicles being offered for as low as $10,000, putting financial strain on smaller EV startups [7] - BYD has reported record monthly deliveries and quarterly earnings that have surpassed Tesla for the first time, indicating a shift in market leadership [6][7] - Tesla's sales in China have recently declined, with shipments from its Shanghai factory falling by 23% from September to October [6] Financial Performance - BYD's hybrid sales have increased by 62% year-on-year, contributing to its strong performance in the market [7] - Despite rising sales, companies like Xpeng, Nio, and Zeekr have reported significant net losses in their latest quarterly earnings, with Nio citing lower vehicle prices as a factor for declining revenue [8]