BYD's Deep Discounts Spark China Industry Alarm Over 'Disorderly' EV Price War Chaos

An industry association warned that aggressive EV price cuts, led by BYD, risk squeezing profits, harming product quality, and threatening consumer safety.

China’s automobile industry association has warned against “vicious competition” following a wave of price cuts by electric vehicle makers, sparked by BYD Co.’s reductions earlier this month.

As of Friday's close, BYD’s stock was at 352.30 yuan on the Shenzhen Stock Exchange, down 8.83 points or 2.5%.

The China Association of Automobile Manufacturers (CAAM) said on Saturday that these “disorderly price wars” risk compressing profit margins, undermining product quality and after-sales service, and jeopardizing consumer rights and safety. 

According to a Bloomberg report, the warning came amid concerns that aggressive discounting could damage the industry’s healthy development.

BYD’s price cuts of up to 34% on May 23 triggered a broader market selloff in EV stocks and prompted rival Li Auto Inc. to revise its revenue forecast downward amid weak demand.

The CAAM urged automakers to follow “fair competition” principles, avoid monopolistic behavior, and refrain from selling below cost to protect the sector’s stability and consumer interests.

BYD nearly doubled its first-quarter (Q1) net profit to RMB 9.15 billion ($1.26 billion) from RMB 4.57 billion a year earlier, matching its recent guidance. 

Meanwhile, operating revenue rose 36% to RMB 170.36 billion, surpassing analyst estimates, and diluted earnings per share increased to RMB 3.12 from RMB 1.57.

On Stocktwits, retail sentiment was ‘bullish’ amid ‘extremely high’ message volume.

BYD stock has risen 30% so far in 2025.

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