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BYD takes fight to EV laggards with China price cuts

BYD takes fight to EV laggards with China price cuts

Not content with unseating Tesla as the world’s top-selling electric car maker, BYD has now set its sights on stealing customers from the likes of Toyota Motor and Volkswagen in one of the most aggressive rounds of discounting seen in China‘s bruising price war. The automaker is currently discounting almost every electric and hybrid car model it sells, as part of a marketing campaign declaring «electricity is cheaper than oil.»

Data from car portal 16888.com analysed by Bloomberg shows BYD has cut prices of more than 100 model versions compared with December, and relaunched a further 70 model trims with lower prices. About the only unaffected models come from its launched Yangwang brand, including its newly unveiled supercar, which goes for 1.68 million yuan ($233,000).

Notably, BYD’s most-affordable EV has become even cheaper still. The Seagull hatchback has been discounted 5% to 69,800 yuan (or less than $10,000, which undercuts the average price of an American EV by more than $50,000). BYD’s top-selling Qin Plus sedan has been discounted even more steeply, by 20% to a starting price of 79,800 yuan. While Chinese EV manufacturers have generally pitched their models at first-time car buyers in wealthy cities like Shanghai and Shenzhen, BYD’s all-out price cuts are aimed at persuading drivers to ditch their gasoline cars and go electric, while also seeking to win customers in smaller cities and rural areas who previously couldn’t afford an EV.
The strategy is a threat to Toyota, Volkswagen and Nissan Motor, which have all been slow to transition to EVs and seen their China sales suffer as a result.

«This is round 2 of the price war,» said Bill Russo, chief executive officer of Shanghai-based consultancy Automobility. «BYD is using its margin advantage to attack the market. If I’ve got more chips in my stack on the poker table, then I’m going to try and bully that person off the table.» The extent of latest price cuts has shocked even long-time observers used to the nature of China’s hyper-competitive auto market. China Passenger Car Association Secretary General Cui Dongshu wrote on his blog last week that discounting has become «ultra intense» and reached «an astonishing level.»