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BYD Stock Dips After Major Price Cuts Despite Surging EV Sales Outpacing Tesla in Europe

BYD Faces Stock Dip Amid Aggressive Discounts and Market Concerns

Published: 27/05/2025

Shares of BYD, China’s leading electric vehicle manufacturer, plummeted 8.6% on Monday following the announcement of significant discounts on various models, igniting fears of a price war in the beleaguered electric vehicle (EV) market. The decline continued into Tuesday, with BYD shares dropping an additional 4% in Hong Kong. Despite this downturn, the stock remains up over 50% year-to-date.

BYD’s sweeping price cuts, effective until June 30, cover 22 electric and plug-in hybrid models, with discounts ranging from 10% to a staggering 34% for select models like the Seal 07 DM-i. This aggressive pricing strategy is seen as a response to slow EV demand in China, exacerbated by economic concerns and rising US-China trade tensions.

Other leading Chinese EV brands, including Geely and Xpeng, also experienced stock declines, with fears that deeper discounts could erode sector profit margins. Analysts predict that these price reductions may spur weekly sales increases of 30% to 40% as BYD aims to reduce its mounting inventory, which has risen significantly in recent months.

Despite initial investor concern, BYD has been on a growth trajectory, outperforming Tesla in European sales for the first time in April, with a 169% increase in battery-electric vehicle registrations. The company’s first-quarter sales reached nearly a million vehicles, solidifying its target of 5.5 million annual sales for 2025.

BYD is also investing in advanced technologies, with the integration of DeepSeek’s AI model, positioning itself competitively against Tesla’s Full Self-Driving technology. As the second-largest battery manufacturer in China, BYD’s vertical integration may enhance its cost control and resilience to external tariffs. With plans for expansion into Southeast Asia and South America and a new manufacturing facility in Hungary, BYD is strategically positioning itself for sustained international growth.

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