Online Reporter
BYD led Chinese electric vehicle stocks lower in Hong Kong yesterday, as investors digested the auto giant’s sweeping price cuts of as much as 35 percent late last week.
The top-performing Chinese automaker’s shares dropped as much as 6,8 percent, while peers Li Auto, Great Wall Motor Co and Geely Automobile Holdings dropped more than 4 percent amid investors’ concern about intensifying competition in the sector.
BYD offered discounts on 22 electric and plug-in hybrid models until the end of June, fanning the flames of a renewed sector-wide price war.
While EV sales have overall reached new annual highs, growth in sales has been decelerating.
Revisions by BYD include paring the price of the Seagull hatchback to 55 800 yuan (US$7 780), a 20 percent reduction to a model that was already the carmaker’s cheapest and one that had garnered global attention for its sub-US$10 000 price tag.
The Seal dual-motor hybrid sedan saw the biggest price cut at 34 percent, or by 53 000 yuan to 102 800 yuan.
In recent months, BYD has attempted to clear inventory of older models, including ones without the new driver assist features — which the carmaker announced in February would be added to its models for free.
The pivot hasn’t been without problems, further hurting struggling car dealers it does business with.
“While some of these discounts have been in place since April, the official announcement sends strong signal of how tough the end market is,” Morgan Stanley analysts including Tim Hsiao wrote in a note. — Bloomberg
Peter Tanyanyiwa