Chinese electric vehicle maker BYD lowered the prices of its models for the first time this year in order to stabilize its existing market share and achieve higher sales targets. BYD previously increased its prices in stark contrast to many Chinese EV makers that reduced their prices at the beginning of this year.
According to Jiemian News, the price reduction applies to BYD’s Dynasty series. Older models are discounted by over 10,000 yuan ($1,435). The 2021 Han EV has been reduced by 20,000 yuan ($2,871) and the 2021 Qin EV has been reduced by 15,000 yuan ($2,153). The prices of new models are generally reduced by between 6,000 yuan ($861) and 8,000 yuan ($1,148). Furthermore, vehicle delivery times have been shortened to varying degrees compared with last year.
Those amounts reflect the price changes in Beijing. Dealerships in Shanghai and Shenzhen have different degrees of price reductions around 10,000 yuan ($1,435). The discounts are expected to end in March.
In addition, some dealerships are providing extra incentives for car buyers in order to sell inventory as quickly as possible and prepare for the low season of car sales from March to April.
BYD’s short-term sales decline and Tesla’s recent price reductions may have led to BYD’s pricing move. In January this year, BYD sold 151,300 electric vehicles, down 35.65% from the previous month, while Tesla sold more than 66,000 vehicles in China, an increase of 18% month-on-month and 10.4% year-on-year. After Tesla cut its prices last year, the starting prices of the Model 3 and the Model Y fell into the range of 200,000 yuan ($28,719) to 300,000 yuan ($43,079), putting them in competition with BYD’s hot-selling Han and Tang series.
BYD’s price reduction could be a sign that stabilizing current market share is a greater priority than maintaining its profit margin in 2023.
According to the 2022 performance forecast released by BYD, one vehicle sold in 2022 yielded an average profit of between 8,500 yuan ($1,220) to 9,000 yuan ($1,292). In the fourth quarter, that figure rose to between 9,800 yuan ($1,407) to 11,200 yuan ($1,608).
In addition, BYD is preparing to launch the new mysterious F brand this year. The first model of the F brand is an off-road vehicle.