BYD shares drop over 10% in two days after EV price cuts

May 27, 2025 (MLN): Shares of BYD Co. extended losses in Hong Kong trading on Tuesday, deepening a two-day slide to more than 10%, following sweeping price cuts across 22 electric and plug-in hybrid models in China.

The stock fell as much as 4% during morning trade, compounding Monday’s 8.6% drop.

The sharp selloff was triggered after the EV giant slashed prices by up to 34% on select models until the end of June, as Bloomberg reported.

The move has reignited investor concerns over another round of discounting in China’s intensely competitive electric vehicle market.

The pricing decision came on the heels of BYD’s slowest year-on-year vehicle delivery growth in over four years.

Although April sales rose 21% compared to the previous year, it marked the smallest monthly gain since August 2020 excluding February 2024, when deliveries dropped due to a 22% industry-wide contraction during the Lunar New Year holiday.

BYD also lost its top-seller status in April, as Geely Automobile Holdings Ltd.’s compact hatchback Xingyuan overtook the popular BYD Seagull, according to data from the China Automotive Technology and Research Center.

Morgan Stanley analysts noted that the price war initiated by BYD is expected to persist, with consequences potentially extending into the second half of the year.

Autos analyst Joanna Chen stated that BYD’s 2025 strategy now clearly emphasizes volume, putting pressure on competitors to either match discounts or cede market share.

She added that China’s auto price discounts, currently averaging 15%-16% this year, could rise further despite government subsidies supporting the sector.

The recent price cuts have somewhat overshadowed a previously stellar year for BYD.

The company hit a record stock high last week, recorded its best sales month in China, outsold Tesla Inc. in Europe for the first time in April, and raised HK$43.5 billion ($5.5bn) through a Hong Kong share sale in March.

Before this week’s decline, BYD shares traded in Hong Kong had surged nearly 75% year-to-date, with a market valuation of approximately $158 billion surpassing the combined value of Ford Motor Co., General Motors Co., and Volkswagen AG.

On the innovation front, BYD has introduced new vehicles capable of five-minute charging and made its God’s Eye advanced driver-assistance system standard in vehicles priced from 100,000 yuan ($13,900), including in several discounted models like the Seagull hatchback.

Investors await further clarity when BYD releases its monthly sales data for May this coming Sunday.

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