Shares of BYD Co., a major Chinese electric vehicle (EV) manufacturer, dropped by 6.8% in Hong Kong trading on May 26, 2025.

This decline follows the company’s announcement of price reductions of up to 35% on 22 electric and plug-in hybrid models.

The price cuts, effective until the end of June, come as EV sales show signs of slowing growth, despite reaching record annual figures.

Other Chinese automakers, including Li Auto Inc., Great Wall Motor Co., and Geely Automobile Holdings Ltd., experienced share declines of over 4%. This indicates investor concerns over heightened competition.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ China’s EV price war follows historical industry pattern of consolidation

BYD’s aggressive 35% price cuts reflect a market maturation phase similar to what the early automotive industry experienced in the 1900s when dozens of car manufacturers competed before consolidation.

The current Chinese EV market features nearly 50 manufacturers competing intensely with discounts averaging 16.8% across the industry 1.

This competition highlights how only the strongest companies survive—currently only three manufacturers (BYD, Seres, and Li Auto) remain profitable amid the price war 1.

Market analysts predict many smaller brands will exit or be acquired within two years, reflecting the consolidation that has occurred during previous automotive technological transitions 1.

The price war is making EVs more accessible, with Geely’s Galaxy EV brand now offering models at just $9,500. However, it raises questions about long-term industry sustainability as profit margins shrink 1.

2️⃣ EV market faces persistent adoption challenges despite technological progress

Despite significant technological advances, today’s EV market still confronts fundamental barriers that have affected electric vehicles for decades.

The 2025 Mobility Consumer Pulse Survey reveals that consumer concerns about range, price, and charging infrastructure remain the primary obstacles to adoption—the same issues that contributed to EV decline in the early 1900s 2.

Regional adoption varies dramatically, with purchase intent at 45% in China but only 12% in the US, showing how market development differs across geographies 2.