BYD is stepping up its cost-cutting efforts to maintain its competitive edge in China's electric car market. The company has reportedly asked suppliers to cut prices by 10% by 2025. - a move that could further fuel the industry's ongoing price war.
A leaked email from BYD executive vice president He Zhiqi recently surfaced on Chinese social media, revealing the company's aggressive cost-cutting plans. The email, titled “BYD Passenger Car Cost Reduction Demands in 2025”, asked the supplier to cut prices by 10% by 2025. The announcement stated: “In order to increase the competitiveness of BYD passenger cars, we need the entire supply chain to work together and continue to reduce costs.“
This aggressive strategy comes at a time when Chinese automakers are struggling with oversupply and stiff competition. Nevertheless, BYD has become a dominant player reporting high sales figures and stable profit margins. A company's ability to control costs and maintain profitability is critical to its success.
Other automakers, including SAIC Maxus, have also taken steps to cut costs in response to competitive market conditions. Tesla, another major player in China's electric vehicle market, recently announced a price cut for its Model Y, underscoring the ongoing price war and its impact on consumer affordability.
As China's electric vehicle market continues to develop, it is clear that cost reduction and pricing strategies will remain critical success factors. While these measures may benefit consumers in the short term, they also present challenges for car manufacturers, suppliers and the wider industry.