BYD (BYDDF (OTC:BYDDF)), the world’s top seller of electric vehicles (EVs), announced price cuts for its entry-level car, the Seagull, deepening the ongoing price war in the Chinese EV market.
The company reduced Seagull’s price by 5%, setting the new starting tag at 69,800 yuan ($9,700).
The move comes after BYD implemented multiple price reductions throughout this year, including a significant cut of nearly 12% on the Yuan Plus crossover, also known as the Atto 3 in international markets.
BYD’s cuts have been more substantial and widespread than those of its competitors.
The reductions come as China experiences uneven economic growth, with sales of new energy vehicles, including pure battery EVs and plug-in hybrids, projected to increase by 13% to 11.5 million units in 2024. This growth rate marks a notable deceleration from the 38% surge seen in 2023.
Other automakers that slashed prices of their EVs in 2024 include Tesla (NASDAQ:TSLA), Geely Auto, GAC Aion, Leapmotor, and Xpeng (NYSE:XPEV).
Analysts with China Merchants Bank International in Hong Kong expect BYD to continue its price-cutting strategy throughout the year.
While these price reductions may impact BYD's gross margins, the negative effect could be mitigated by cost-saving measures from its suppliers.