BYD stock drops 8.3%, affecting other Chinese automakers

Chinese EV giant BYD’s shares plunged 8.3% on Monday after the company slashed prices across 22 models to accelerate sales by as much as 34%.

The move had alarmed investors, and as a result, shares of other automakers dropped.

By cutting prices, BYD also signals sluggish growth in China, the world’s biggest car market.

Its cheapest model, the Seagull, now starts at just $7,780 (55,800 yuan).

Despite China’s annual EV sales reaching new highs, dealership inventories have reached 3.5 million cars, the highest since December 2023, according to the China Passenger Car Association.

Analysts predict that BYD’s price cuts will trigger sector-wide discounts, as it may force smaller rivals to cut prices. Chinese automakers, like Chongqing Changan Automobile Co. and Zhejiang Leapmotor Technologies Ltd., have already adjusted their prices.

Citi estimates the carmaker’s traffic surged up to 40% after its price cuts announcement, and it’s still on track to hit 5.5 million annual sales.

BYD overtook Tesla in electric car sales in China in 2023 and Europe in April.