It’s a discount duel in China’s electric vehicle (EV) arena, and BYD just fired the latest (and possibly sharpest) shot. The company slashed prices across more than a dozen of its models, sending shockwaves through the Chinese auto market and making its cheapest ride—the battery-powered Seagull—available for just 55,800 yuan (a hair under $7,800). For context, that’s roughly the cost of a month’s rent for a two-bedroom apartment in San Francisco.
This isn’t just your garden-variety promotional sale. Analysts are calling this a tipping point, and not the good kind. Think “domino effect meets demolition derby.” What’s unfolding is the latest phase in a prolonged, increasingly ruthless price war in China’s already oversaturated EV market.
While BYD’s lowball move might win it more customers in the short term, it’s also exposing the fragile foundations of startups like Neta and Polestar—companies already teetering on the brink. And it’s not just carmakers feeling the squeeze. Suppliers are starting to groan under the weight of slashed margins, aggressive pricing, and unrealistic expectations.
Great Wall Motors chairman Wei Jianjun didn’t mince words. Comparing today’s auto market to the infamous Evergrande property collapse, he warned that the automotive industry is playing with the same fire, just with flashier wheels. Meanwhile, regulators are poking around suspicious “used car” listings that are actually brand-new vehicles. (Yes, really. Used-but-not-used cars. Welcome to 2025.)
The market's anxiety is already reflected in investor behavior. Shares of BYD, Geely, Nio, and Leapmotor all took a nosedive, falling between 3% and nearly 10%. More than half of China’s 169 automakers now hold less than 0.1% of the market share. It’s starting to look like a déjà vu of the early 1900s U.S. auto boom, minus the roaring optimism.
Tu Le of Sino Auto Insights warns this isn’t a blip—it’s a full-scale collision course. “This could be the first domino,” he noted, pointing out that loss-sustaining players simply can’t keep up. Meanwhile, Michael Dunne, a veteran industry consultant, emphasizes that consolidation has been forecasted for years. “But for every casualty,” he quips, “there’s a new Xiaomi or Huawei ready to leap in.”
Translation? Fewer seats at the EV table, but plenty of new guests still RSVP’ing.
SMBs in or connected to the auto industry—especially parts suppliers, tech startups, and logistics providers—are caught in the headlights of this price war. Here’s why it’s not all bad news… if you drive smart.
