If BYD is so popular, it is thanks to its electric vehicles that are less expensive than the competition and equipped with great technologies. Some are even arriving in Europe like the Sealion 7 which was present in Paris. But the company is also banking on its subsidiaries, for example, Denza and its powerful Z9 sedan.
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BYD requests a 10% cut from its suppliers
Asked about the veracity of this email, BYD first indicated that a verification is underway. Li Yunfei, general director of brand and public relations, later clarified on the Chinese social network Weibo that annual price negotiation with suppliers is a common practice in the automobile industry. “We offer a reduction target based on mass purchases. This is not obligatory, we can negotiate”he explained without, however, confirming the percentage of 10% requested from suppliers.
The email in question is circulating and talks in particular about BYD’s impressive sales performance: 3.25 million vehicles sold from January to October with a forecast exceeding 4.2 million units for the year 2025. These data show the growth meteoric rise of the automobile manufacturer.
BYD’s bargaining power over its supply chain strengthened in the face of huge 2023 sales according to Tencent News. Requests for price reductions of 10 to 20 percent per year are common and the automaker’s massive purchasing volumes leave suppliers with little choice unless they occupy an irreplaceable strategic position.
Competition is fierce in the Chinese market
BYD’s strategy aligns with the current price war in the electric vehicle market. Tesla announced a discount of approximately $1,380 for orders of certain versions of the Model Y placed before December 31 in China with a five-year 0% financing offer for this model and the Model 3.
Official figures from BYD show this rise: 502,657 new energy vehicles sold in October exceeded 500,000 units for the first time and marking a fifth consecutive monthly record.
Over the January-October period, sales reached 3,250,532 units, up 36.49% year-on-year. If sales in November and December maintain the October level BYD could reach around 4.3 million vehicles for the year, an increase of 42% from 3.02 million in 2023.
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