BYD’s share price fell sharply after Beijing voiced concerns that an escalating electric vehicle (EV) price war could undermine the reputation of Chinese manufacturing.
The stock dropped 2.4% on Monday, extending its losses to 17% over the past week, following a strongly worded editorial in The People’s Daily, the official newspaper of China’s Communist Party.
The article warned of the “hidden dangers” of aggressive price-cutting in the EV sector, cautioning that “low-cost and low-quality products” risk tarnishing the hard-earned international reputation of the “Made in China” brand.
BYD has been slashing prices in a bid to outcompete rivals like Tesla. It’s the Seagull hatchback now costs just 55,800 yuan (£5,712), after a 20% price cut, making it around 75% cheaper than Tesla’s most affordable model.
The People’s Daily piece criticised the reliance on price wars to drive short-term gains, stating: “Don’t distort business logic under the coercion of capital, and only use price wars to pursue short-term market value and stock price.
Otherwise, after the capital is cashed out and leaves, the industry will only be left with an empty shell of ‘losing money and making money’.”
