Chinese electric vehicle giant BYD has scaled back production at several of its domestic factories and delayed expansion plans amid signs of market saturation and intensifying competition, according to sources familiar with the matter.
Two individuals with knowledge of the matter told Reuters that BYD has cancelled night shifts and cut output by at least a third in some plants. The move comes as BYD grapples with ballooning inventories following a wave of discounting that reshaped China’s EV market in recent months.
BYD has seen meteoric growth, becoming the world’s largest EV manufacturer and the top-selling carmaker in China. But the recent pullback suggests the company may be entering a more cautious phase, with sales momentum softening despite aggressive pricing strategies.
The China Automotive Dealer Association reported in May that BYD’s average dealer inventory had surged to 3.21 months — the highest of any brand in the country — more than double the national industry average of 1.38 months. In response, the China Auto Dealers Chamber of Commerce called on manufacturers to align production more closely with actual sales.
Production cuts reportedly affect at least four of BYD’s seven domestic factories. Some new production lines have also been shelved. While BYD has yet to comment publicly, one source cited cost-saving measures, while another linked the decision to underperforming sales targets.
BYD sold 4.27 million vehicles globally in 2023 and aims to reach 5.5 million this year. Roughly 80% of its sales remain in China, but the company continues to push into international markets, with plans to launch production in Hungary by late 2025 and establish a European headquarters in Budapest.
