China’s biggest carmaker, BYD, has rolled out sweeping price cuts across its Dynasty and Ocean series electric vehicles in a move that underscores growing pressure in the world’s largest auto market. The discounts — as high as 34% — come amid ballooning dealer inventories and a cooling appetite among Chinese consumers, and have sent shockwaves through the sector, dragging down share prices and fuelling fears of another bruising price war.
The promotion, announced late last week on Chinese social media platform Weibo, covers 22 electric and plug-in hybrid models and will run through the end of next month. Among the headline offers is the compact Seagull EV from BYD’s Ocean range, a budget model that recently debuted in Europe and Belgium under the name Dolphin Surf.
The car now starts at RMB 55,800 (approximately €7,100), down from RMB 69,800. Meanwhile, the Dynasty series’ plug-in hybrid Qin Plus DM-i has dropped to RMB 63,800 (€8,100), down from its previous listing of RMB 79,800.
Stockpiles and slowing sales
The aggressive discounting reflects a deeper malaise in the market. According to analysts at Deutsche Bank, BYD’s dealer-level inventory surged by 150,000 vehicles in the first four months of 2025, equivalent to half a month’s retail sales. Current stock levels are estimated at three to four months, a threshold seen as unsustainable for dealerships.
The company’s ambitious target of selling 5.5 million vehicles this year — a 30% increase on 2024 — is increasingly out of step with its current sales pace, which shows just 15% growth year-on-year. The discounts are a clear attempt to bridge that gap. But the strategy has not come without cost: BYD’s shares tumbled more than 8% on the Hong Kong exchange on Monday, while competitors Geely and Great Wall Motor also suffered losses of over 5%, as investors braced for a fresh round of margin pressure.
Ripple effect
Predictably, BYD’s rivals have wasted little time responding. IM Motors has cut the price of its LS6 SUV by RMB 45,000 to RMB 194,900, while Leapmotor has announced price reductions of over 30% on its C11 and C16 extended-range electric SUVs. Geely’s Galaxy sub-brand has joined the fray with discounts ranging from 8 to 18% on several models.
Analysts say the discounts could spark a broader price war. The last major price war erupted in 2023 after Tesla slashed prices, sending tremors through the industry. That skirmish centred largely on mid-range EVs. This time, the focus has shifted to the low-cost end of the market — a space where profit margins are already razor-thin.
Citi Research analysts say the new wave of price cuts “sends a strong signal about the harsh realities of the final market,” warning of further escalation. German carmakers, for their part, have long avoided joining such pricing battles, branding them as “ruinous.” For now, they appear content to prioritise margins over market share — even if that means ceding more ground in China’s fiercely competitive EV landscape.
