TLDRs;
- BYD sold a record 377,628 vehicles in June 2025, the highest monthly figure this year.
- Price cuts of up to 34% helped drive demand but triggered a US$20 billion market value drop.
- China’s regulators are cracking down on EV price wars, prompting BYD to scale back discounts.
- Despite domestic risks, BYD is gaining ground in Europe, nearly quadrupling sales in early 2025.
Chinese electric vehicle giant BYD has recorded its best monthly sales of 2025, driven by deep price cuts aimed at winning over cost-conscious consumers and clearing dealership inventory.
The automaker sold 377,628 vehicles in June, including over 206,000 fully electric passenger cars, marking a 10% jump from the same period last year.
The June milestone pushed BYD’s total vehicle sales for the first half of 2025 to 2.1 million units, putting the company well on track to surpass its full-year targets. However, the impressive sales performance came at a cost.
In late May, BYD slashed prices by as much as 34% across several models, a bold move that sparked a price war across China’s EV market. While effective in boosting demand, the tactic triggered a wave of investor unease, resulting in a US$20 billion drop in BYD’s market capitalization.
Price cuts power sales, but margin concerns mount
The surge in sales was a much-needed win in a fiercely competitive market. Yet, analysts warn that the strategy highlights a growing tension between market share and profitability. BYD’s first-quarter earnings showed a 30% year-over-year drop in net profit to US$1.5 billion, despite a 39% surge in sales volumes. Gross margins also narrowed to between 10% and 15%, significantly lower than Tesla’s 18% during the same period.
This margin pressure is being felt across China’s EV industry, with inventory buildup forcing automakers to discount heavily. BYD’s dealership stock reportedly reached 3.21 months’ worth of unsold vehicles, more than twice the industry average. These stockpile levels prompted the late-May discount campaign aimed at clearing space for upcoming models.
Regulatory pressure reshapes discounting tactics
Beijing has taken note of the intensifying price battles and their wider implications. In an unusual intervention, Chinese authorities criticized what they described as “rat-race competition” that threatens the credibility of the nation’s auto sector. The People’s Daily, a key state media outlet, warned that unchecked price wars could damage the long-term reputation of Made-in-China vehicles.
In response to mounting regulatory scrutiny, BYD has already begun phasing out some of its discount programs. The company also joined an industry-wide pledge to normalize supplier payment terms to 60 days, a move seen as part of Beijing’s push to stabilize supply chains and limit aggressive financing practices that put upstream vendors at risk.
International growth continues
While domestic pressure mounts, BYD’s global ambitions are gaining traction. The company recently launched its new Dolphin Surf hatchback in Rome, signaling a continued push into the European market. European sales in the first four months of 2025 nearly quadrupled from the same period in 2024, with BYD outpacing Tesla in regional EV registrations.
This overseas momentum suggests BYD is hedging its domestic challenges with a more diversified global strategy. Still, the core question remains whether its current growth model, fueled by heavy discounts and narrow margins, can sustain long-term success.
