BYD shares continue to fall after major EV price cuts

Shares of BYD dropped 2.96% on May 27, 2025 after a 9% fall on May 26, 2025, reversing gains from its recent record high.

The selloff follows BYD’s May 23, 2025 announcement of price cuts on 22 electric and hybrid models, including a 20% cut for the Seagull and 34% for the Seal sedan.

Earlier this year, BYD had already slashed prices for Han sedans and Tang SUVs by over 10%.

Citi analysts noted a 30 to 40% rise in showroom traffic after the cuts, but warned of market concern over a broader price war.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Chinese market maturity triggers competitive pricing shifts

BYD’s aggressive price cuts are happening in a market that’s reaching new levels of maturity, with overall Chinese EV registrations growing by 38.2% in 2024 to reach 11.2 million vehicles 1.

Despite maintaining market leadership with 3.52 million deliveries in 2024, BYD’s market share actually decreased by 2.5 percentage points as competition intensified 1.

This pricing strategy comes amid a broader industry trend of declining EV prices, with data showing used EV prices falling by 31.8% over the past year in other markets like the US 2.

The price competition reflects China’s dominant position in global EV sales, accounting for approximately 60% of worldwide electric car purchases 3.

For BYD, these cuts appear strategically timed to maintain volume growth in the face of rising competition from companies like Wuling, Tesla, Li Auto, and Geely, all of which hold significant market shares in China 1.

2️⃣ EV market facing supply-demand recalibration globally

BYD’s price cuts mirror a global trend of EV manufacturers adjusting to market realities after a period of overproduction and changing consumer demand patterns 4.

Market analysts have identified overproduction and market saturation as key factors driving price reductions across the EV sector 4, 5.

The pattern of price cuts began notably with Tesla in 2023, which triggered a cascade effect on both new and used EV pricing across markets 4.