After the announcement of massive discounts Byd on Monday in Hong Kong for a significant slump in Chinese electric car shares. The BYD share temporarily dropped by more than 8 percent, while competitors such as Li Auto, Great Wall Motor and Geely also had to accept losses of more than 5 percent. The triggering of the losses of the course were feared by investors that the price war could further exacerbate the pressure to compete in the industry BloombergÂ
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BYD last had in China The prices for 22 electrical and hybrid models partly drastically reduced- for individual models by up to 34 percent. The goal: to boost the weak demand and reduce stocks.
Hybrid price reduced by 34 percent
The entry -level model Seagull, which is now offered for around $ 7780 (6835 euros) – is particularly affected – a minus of 20 percent. With the Seal dual motor hybrid, there are even 34 percent discount.
The price cuts put pressure on the entire industry. Other manufacturers such as Changan and Leap motor have already followed up. The result: margins shrink, competition becomes tougher and many smaller providers are stumbling.
Despite the tense situation in China, BYD remains on the road to success. In April, the group sold more electric cars in Europe for the first time than Tesla – a milestone for expansion. A closer look at the sales statistics, however, reveals thatÂ
that the group has polished its balance sheet with some legal methods. While sales of private and business customers are considered the actual yardstick in automotive sales, BYD primarily goes to dealers and car rental companies. This ensures impressive total numbers, but does not necessarily reflect the actual demand for end customers.
Nevertheless, thanks to its own battery and semiconductor production, BYD is more resistant in price war than many competitors. The gross margin recently was around 20 percent, the net profit even exceeded Tesla.