BYD (BYDDF) just posted its strongest sales month of 2025, moving 377,628 vehicles in Juneincluding over 206,000 battery electric cars. That pushed first-half volumes to 2.1 million units. The surge followed a round of deep price cutsup to 34% on some modelsrolled out in late May. But while the discounts may have supported unit growth at home and nearly quadrupled sales in Europe, the move has been a double-edged sword. Investors didn’t love it. The stock has shed more than $20 billion in market value, as concerns over margins and profitability mount.
Regulators didn’t love it either. Beijing pushed back hard on what it called rate race competition, pressuring automakersincluding BYDto dial it down and stabilize the market. In response, BYD walked back some of its discounts and joined a new industry agreement: suppliers must now be paid within 60 days. That’s a clear sign that policymakers are watching pricing behavior closelyand scrutinizing the use of supply chain financing as a hidden form of leverage.
Meanwhile, the global EV leaderboard could be in for a shakeup. In Europe, BYD nearly matched Tesla (NASDAQ:TSLA) in registrations in May after outperforming in April. Geely’s June deliveries jumped 59% year-over-year, prompting a new 2025 target of 3 million units. But as China’s EV giants look overseas to offset domestic slowdown, investor focus is shiftingfrom who sells the most, to who protects their margins best.
This article first appeared on GuruFocus.
