BYD, China’s top electric vehicle (EV) manufacturer, has requested price cuts from its suppliers for the coming year, signaling its intention to intensify the price competition in the domestic market while further expanding into Europe and other regions. According to a leaked letter circulating on social media, the company has asked a supplier for a 10% price reduction starting in January. The email, which surfaced on Weibo, highlights BYD’s strategy to drive costs down amid an ongoing price war in China.
In response to the leak, BYD’s PR and branding director, Li Yunfei, clarified the company’s position in a Weibo post, stating, “Annual bargaining with suppliers is a common practice in the automotive industry. We put forward price reduction targets to suppliers. They’re not mandatory requirements. We can negotiate.”
Over the past two years, BYD has played a central role in the price war, reducing vehicle prices aggressively and putting pressure on smaller competitors. This has contributed to market consolidation, with some companies, such as HiPhi and WM Motor, filing for bankruptcy. Meanwhile, major automakers like Volkswagen and Stellantis have formed partnerships with Chinese brands, including Xpeng and Zhejiang Leapmotor, to combat BYD’s dominance.
BYD continues to expand its footprint, ramping up production by nearly 200,000 units to meet demand. The company has also hired approximately 200,000 new employees in the past three months. BYD, which sold a record 500,000 vehicles in October, is on track to exceed 4 million units sold by the end of this year, cementing its position as China’s leading car brand. In the July-September quarter, BYD’s net profit surged to 11.6 billion yuan ($1.63 billion), with revenue climbing 24% year-on-year to $28.24 billion, surpassing Tesla’s quarterly revenue of $25.2 billion for the first time.
Despite strong domestic sales, BYD remains focused on international expansion, aiming to double its exports to 450,000 vehicles this year, despite the challenges of higher tariffs.
Source: Bloomberg
