Chinese brands are starting to fear the price war

It all started with an internal email sent by BYD to one of its suppliers. The Chinese giant, world leader in rechargeable vehicles (electric or hybrid), has in fact requested a price reduction of around 10% from next year. A letter which was then confirmed by BYD. In reality, this practice is not very exceptional since most of the big names in the automobile industry are pressuring their equipment manufacturers to reduce their prices. Renegotiations are therefore common, but they occur here in a particular context for Chinese brands stuck, for some, in a total war. It must be said that the Chinese market has reached saturation of supply and that it is becoming difficult to follow the evolution of each brand and sub-brand. But for BYD, which seems sheltered from violent winds thanks to its scale, nevertheless admits to preparing for more difficult times.

Decisive battle

The vice president of BYD confirmed that the new energy vehicle market (plug-in hybrids and electric) was going to enter a “decisive battle” in a match by “KO”. Understand by this that in 2025, some could pay the price of the price war which will result from the slowdown in electric sales in certain areas of the globe. Competitor SAIC would have made the same requests to its suppliers, citing the excessive stock in China, a sign of increasing difficulty in selling plug-in vehicles. In Europe, equipment manufacturers, already under great social pressure, could also find themselves under the influence of manufacturers who will wait for more competitive prices to stay ahead of their competitors.