Core Viewpoint - The recent price cuts by BYD have intensified the competitive landscape in China's electric vehicle (EV) market, leading to significant declines in the stock prices of major competitors, raising concerns among investors about the sustainability of the price war [1][2][5]. Group 1: Price Cuts and Market Impact - BYD announced price reductions on 22 electric and hybrid models, with the Seagull hatchback's price dropping from 69,800 yuan ($9,700) to 55,800 yuan ($7,750) [2]. - Following BYD's price cuts, shares of BYD fell by 8.6%, while Geely and Great Wall Motors saw declines of over 9% and 5% respectively, with other EV makers like Xpeng, Nio, and Li Auto also experiencing stock price drops [1][2]. Group 2: Industry Concerns - Industry experts have expressed concerns that the ongoing price war is unsustainable, as many Chinese EV startups continue to report substantial losses, with some companies losing billions of dollars each quarter [4]. - Volkswagen's CEO described the price war as "ruinous," indicating that it cannot continue indefinitely, while the head of Xpeng warned that most Chinese car companies may not survive the next decade [5]. Group 3: BYD's Performance - Despite the price cuts, BYD is projected to sell over 5 million cars this year and has outsold Tesla in electric vehicle sales in Europe for the first time in April [5]. - BYD is set to launch the Dolphin Surf, the European version of the Seagull, in 15 European markets starting at 23,000 euros ($26,000), which is significantly lower than Tesla's cheapest model [6].
BYD just fired another shot in China's EV price war — and investors are worried