BYD has asked suppliers to accept lower prices next year, signaling the Chinese electric car maker is preparing for an escalation of a brutal price war in the world’s biggest car market.
On Wednesday, a screenshot of an email purported to be from the Shenzhen-based auto giant went viral on social media, demanding a 10% price cut from an unnamed supplier starting in January.
“Annual negotiations with suppliers are a common practice in the auto industry,” Li Yunfei, BYD’s public relations and branding director, said in an emailed response. Weibo Wednesday’s post. “We have presented price reduction targets to our suppliers. They are not mandatory requirements. Negotiations are possible.”
The email signals that the EV maker is poised to weather further discounts next year. Price competition in China’s auto market, which has been intensifying for at least two years, has triggered a wave of consolidation and pushed small companies to the brink.
Western automakers such as Volkswagen AG and Stellantis NV are seeking to leverage their EV expertise by partnering with Chinese brands such as Xpeng and Zhejiang Leap Motor Technology, while luxury EV brands HiPhi and Shanghai The company’s headquarters, WM Motor, is mired in bankruptcy. minutes.
BYD has so far come through the turmoil largely unscathed, if not strengthened. Earlier this year, the company led new price cuts across the industry, gaining market share and crowding out weaker rivals.
It continues to deliver record levels of revenue and profits. In the most recent quarter, sales surpassed Tesla Inc.’s for the first time, and gross profit margin rose to 21.9%, the highest level in a year.
The company has grown to become China’s best-selling car brand, selling around 3.2 million plug-in hybrid and electric vehicles this year, with record sales of 500,000 units in October. . It plans to sell at least 4 million units by the end of the year.
