BYD(SZ:002594) Di Yi Cai Jing·2025-05-27 14:15Core Viewpoint - The recent price war in the automotive market, particularly in the electric vehicle sector, reflects the maturity and competitiveness of China's automotive industry, indicating a shift towards sustainable service models rather than mere product sales [3][4][5]. Group 1: Price War Dynamics - BYD initiated a promotional campaign on June 18, offering subsidies up to 53,000 yuan, marking a continuation of price reduction strategies that began in March [1]. - Following BYD's lead, other manufacturers like Geely and SAIC have also started to engage in price competition, intensifying the automotive price war [1][2]. - The price war is seen as a normal market competition rather than a destructive "involution" as long as it does not lead to unfair practices like dumping or quality degradation [3][4]. Group 2: Implications for Policy and Industry - The resurgence of the price war suggests that the Chinese electric vehicle industry has matured to a point where government subsidies may no longer be necessary, prompting a reevaluation of existing support policies [4]. - The government is encouraged to consider ending subsidies for electric vehicles, as companies engaging in price wars should not simultaneously benefit from state incentives [4]. - Financial performance data from Q1 indicates that companies like BYD and Geely have achieved revenue growth and maintained positive net profits, reinforcing the legitimacy of the price war [4]. Group 3: Evolution of Automotive Business Models - The automotive industry is transitioning from a focus on product sales to a model centered around sustainable services, reflecting changes in consumer behavior and technology [5]. - As electric vehicles become more multifunctional and integrated into various service scenarios, the core value of automobiles is expected to shift towards service satisfaction rather than just transportation [5]. - This evolution may lead to new business models, such as purchasing smart driving capabilities while enjoying mobile office and consumption services [5].