Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Business
ED CARSON

Tesla Rival BYD Tumbles After Launching China EV Price War. Several Rivals Fire Back.

BYD dived Tuesday after the EV giant launched a big China EV war. Several rivals fired back with big discounts, with even more China EV stocks falling solidly to start the week, even as Tesla stock soared.

On Friday, BYD announced 10%-34% discounts on its BYD-branded models through June 30, with the heavier discounts generally on the low end. A Seagull EV is now RMB 55,800 ($7,745), down 20% from RMB 69,800. The Seal hybrid sedan saw a 34% price cut to RMB 102,800 ($14,269).

The EV giant has not announced price cuts on its premium Denza, FangChengBao and Yangwang lines.

IM Motors, Leapmotor and Geely's Galaxy have also announced discounts on certain models. XPeng, Nio and Li Auto haven't responded so far.

Tesla also has not, though it previously introduced cheap financing for the new Model Y. China has been Tesla's strongest market, but Chinese registrations have lagged so far in Q2.

BYD is generally viewed as the low-cost producer in China, reflecting its in-house production of batteries and many key components as well as its ability to extract volume discounts from suppliers. So it has more scope to get prices lower than rivals, many of which are not profitable.

Rising inventories at BYD dealers reportedly spurred the automaker's move, along with a desire to reach 5.5 million in sales this year, up from just over 4 million in 2024.

The EV maker's discounts don't apply to its surging overseas sales. Those already tend to have higher margins. That gives BYD another edge over rivals that are almost entirely reliant on the cutthroat China market.

Still, hefty price cuts will likely squeeze BYD's profit margins.

China price wars are nothing new. Tesla helped kick off big discounts in early 2023, as the U.S. EV giant slashed prices worldwide.

In early 2024, BYD spurred a wave of price cuts.

In February, BYD announced it was rolling out advanced driver-assist systems across its lineup at no added price. That's forcing some rivals such as XPeng to follow suit. That standard ADAS push has tempered hopes that Tesla could reap big revenue from Full-Self Driving in China.

Tesla Has New Buy Point; Rival Runs To High, Launches Price War

China EV Stocks

BYD's U.S. shares dived 9.75% on Tuesday to 53.70, just holding a 53.35 buy point and 21-day moving average. BYDDF, leaped 6.7% last week to 59.50, hitting a record high.

U.S. shares of XPeng stock, Nio and Li Auto fell 3.8%, 4.1% and 2.6%, respectively.

Leapmotor and Geely Auto, which don't trade in the U.S., fell 1% and 1.7%, respectively in Tuesday's Hong Kong trading. That's after plunging 8.4% and 9.5%, respectively, on Monday.

Tesla stock leapt 6.9% to 362.89 Tuesday, clearing an aggressive entry at 354.99 in a handle that's too low to be proper. The BYD-led price war presumably affect the U.S. EV giant, with Q2 China sales already soft. But investors are focusing on robotaxi hopes.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.