BYD shares plunge after steep price cuts, as its EV sales in Europe surpass Tesla

BYD shares plunged 8.6% on Monday after reports of steep discounts on several models, sparking concerns over a potential new round of price wars in China’s electric vehicle market. Despite this, the Chinese auto giant is still expected to maintain strong growth, especially in its ongoing rivalry with global competitor Tesla.

During Tuesday's Asian trading hours, BYD shares continued to decline, falling another 4% on the Hong Kong Stock Exchange by 5 a.m. CEST. Despite the recent drop, the stock remains up over 50% year-to-date. In contrast, global rival Tesla's shares were little changed on Monday and are down 13% so far this year.

Amid persistent weakness in China’s economy and rising U.S.-China trade tensions, BYD’s aggressive pricing strategy has fueled concerns about softening EV demand. Shares of other major Chinese EV makers also dropped on Monday, with Geely, Great Wall Motor, and XPeng down between 4% and 9%, as investors worried that further discounts could erode industry profit margins.

According to BYD’s official Weibo account, the automaker has announced broad price cuts across 22 of its all-electric and plug-in hybrid models, with discounts effective until June 30. The cuts, ranging from 10% to 30%, apply to models from both the Ocean and Dynasty series. The largest discount is on the Sealion 07 DM-i, reduced by as much as RMB 53,000 (approximately €6,460), marking a 34% price drop.

Analysts expect that, as domestic competition intensifies, other Chinese automakers may follow BYD’s lead. The aggressive pricing also appears aimed at clearing excess inventory of older models. According to CnEVPost, BYD’s dealership inventory rose by about 150,000 vehicles in the first four months of 2025—roughly equivalent to half a month’s retail sales.

Citi analysts estimate the price cuts could spur a 30% to 40% surge in weekly sales, potentially offsetting the impact on profit margins.

BYD Maintains Strong Growth as European Sales Surpass Tesla

Despite investor concerns, BYD continues to demonstrate strong growth and pose a serious challenge to Tesla in global markets. In April, BYD sold 380,089 new energy vehicles (NEVs), a 21% year-over-year increase. Its overseas sales also set new records for the fifth consecutive month.

For the first time, BYD surpassed Tesla in monthly EV registrations in Europe, delivering 7,231 units in April—a 169% year-over-year surge. In contrast, Tesla’s European sales declined in 2025, partly due to growing anti-Tesla sentiment driven by CEO Elon Musk’s involvement in political controversies.

In the first quarter of 2025, BYD sold nearly 1 million vehicles and is steadily advancing toward its annual goal of 5.5 million units. The company reported a net profit of RMB 9.15 billion (approx. €1.11 billion), with a gross margin of 20%. Tesla, by comparison, posted a net profit of RMB 409 million (approx. €359 million) and a 16% margin over the same period.

BYD is also investing in advanced driver-assist technologies. Its DeepSeek R1 AI system is expected to rival Tesla’s Full Self-Driving (FSD) capability but at significantly lower cost. In battery manufacturing, BYD ranks second only to CATL in China, benefiting from superior cost control and vertical integration.

With no passenger car sales in the U.S., BYD is less exposed to U.S. tariffs and instead focuses on growth in Southeast Asia and South America. The company’s new manufacturing facility in Hungary is expected to further boost its presence in Europe.

Want to explore BYD accessories or learn more about our latest product launches? Visit FANS BYD and subscribe for updates.