BYD triggers a second wave of price cuts to defend market share
In May 2025, BYD launched a fresh round of price reductions across more than a dozen electric vehicle (EV) models, with discounts reaching up to 34%. Its most affordable EV now retails at RMB 55,800 (~S$10,400). This aggressive pricing strategy has ignited a broader price war, with rivals such as Geely and Leapmotor also cutting prices, intensifying competition across China’s EV market. Source: Finance China.com
Razor-thin margins raise concerns over sector sustainability
The widespread price cuts are pressuring already thin profit margins across the auto industry. According to China’s National Bureau of Statistics, net margins fell to 3.9% in 1Q2025, down from 4.3% in 2024. Investors are increasingly worried that prolonged pricing pressure may push weaker automakers into financial distress, drawing parallels with past challenges faced by China’s property sector. Source: Reuters
Structural issues persist:
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