BYD’s sales fall for the fifth month in a row, here’s why it could intensify the price war globally

Greater pressure on prices outside China

When BYD slows down at home, the most common response is to step up actions and “push volume” through exports. This can further lower the prices of electric cars in segments where BYD is strong, especially in more accessible models and fleets. The consequence is that competitors, from other Chinese brands to European and Korean manufacturers, often have to react with discounts or richer equipment packages.

Europe gets an even stronger “price shock” in the mass segment

BYD and other Chinese manufacturers and larger have changed the game in the lower and middle price ranges. If exports increase further, the pressure would be felt most on models that are today “on the edge” of price profitability in the EU, especially with brands that have thinner margins on electric cars anyway.

Acceleration of consolidation and shutdown of weaker games

Reuters reports that BYD is losing some ground to rivals such as Geely and Leapmotor in the sub-$25,000 segment, a sign of how brutally competitive the market in China is. When this dynamic increases, weaker producers (and suppliers) globally run into problems, so the scenarios of mergers, supply cuts and closure of certain lines are more realistic.

Pressure on Tesla and “old” products, or even on used EVs

If new EVs become cheaper on average due to promotions and excess supply, this also brings down the prices of used electric cars in several markets. That’s good for used buyers, but bad for those counting on higher resale value and for leasing models that depend on residual value.

Consequences for the supply chain of batteries and raw materials

Fewer deliveries or stronger discounts mean pressure on margins, and this is often transferred down the chain: from battery cells to logistics and raw materials. In practice, this can lead to more aggressive negotiations with suppliers, changes in orders and accelerating the transition to cheaper battery chemistries in mass models.