- BYD stock was down 6.53 percent in Hong Kong and 3.89 percent in Shenzhen at press time.
- BYD has started offering wide-ranging discounts, raising concerns about stiffer competition.
BYD (HKG: 1211, OTCMKTS: BYDDY) shares traded in both Hong Kong and Shenzhen were down in early Monday trading, as wide-ranging price discounts stoked the risk of a price war.
BYD fell 6.53 percent to HK$434.8 in Hong Kong and 3.89 percent to RMB 389.25 in Shenzhen at press time.
On Friday, the heads of both BYD's Dynasty and Ocean series announced on Weibo that both product arrays had begun offering wide-ranging discounts on affordable models.
For example, the Ocean series' Seagull is now priced from RMB 55,800 for a limited time until June 30, down from the RMB 69,800 official guide price.
The Dynasty series' Qin Plus DM-i is priced from RMB 63,800 for a limited time, down from the official guide price of RMB 79,800.
The discounts for the Dynasty series models do not include the government trade-in subsidies, while the discounts for the Ocean series include the government trade-in subsidies.
According to Deutsche Bank, the promotion is mainly due to the rapid growth of dealer inventories.
In the first four months of 2025, BYD dealer inventories increased by about 150,000 units, equivalent to half a month's retail sales, analyst Wang Bin's team said in a May 24 research note.
"According to our dealer checks, BYD's dealer-level inventory is currently at 3-4 months, likely the maximum level that the dealers can bear," Deutsche Bank wrote.
As a result, BYD has decided to launch more promotions to reduce dealer inventory, the team said.
The increase in dealer inventories is largely due to BYD's ambitious sales targets, with the company aiming to sell 5.5 million vehicles in 2025, representing a 30 percent year-on-year increase, Deutsche Bank noted.
However, BYD's retail volume growth in the first four months was only 15 percent year-on-year, the team said.
According to Deutsche Bank, BYD's additional price discounting measures could lead to further price competition in the mass-market price range and trigger more competitors to follow suit.
For example, Dongfeng Motor last week cut the starting price of its eπ 007 sedan from RMB 132,000 to RMB 120,000, a 9 percent, or about RMB 12,000, price cut.
IM Motors announced earlier today that the starting price of the LS6 electric SUV (sport utility vehicle) has been reduced to RMB 194,900 before June 30, and consumers can additionally benefit from the national trade-in subsidy.
The LS6 was launched in August last year at an official starting price of RMB 239,900, with a discounted starting price of RMB 216,900 at the time.
Leapmotor (HKG: 9863) announced yesterday that the price of the entry-level version of the extended-range electric vehicle (EREV) variant of the C16 SUV has been reduced from RMB 155,800 to RMB 111,800 for customers who purchase the vehicle before June 8.
For the entry-level version of the EREV variant of the Leapmotor C11 SUV, the price has been reduced from RMB 148,800 to RMB 103,800.
