After the big price drop, BYD's sales in May reached the highest this year

Price for Volume?

Under a new round of intense price wars, leading electric vehicle company BYD's sales data for May reached a new high for the year.

On June 1, BYD Auto's official Weibo announced that BYD sold 382,476 vehicles in May, a year-on-year increase of 15.3%. This data once again set a new monthly sales record for the year.

Among them, overseas sales of passenger cars and pickups reached 88,640 units, with sales of BYD's Dynasty/Ocean series at 348,393 units, Equation Leopard sales at 12,592 units, Tengshi sales at 15,806 units, and Yangwang sales at 139 units.

Data shows that BYD's pure electric passenger car sales in May reached 204,369 units, surpassing the plug-in hybrid models' 172,561 units. This is the second time since the beginning of 2024 that pure electric sales have led.

Overseas sales data is also a highlight, with BYD's overseas sales of approximately 89,000 units setting a historical high. The company's internationalization strategy is accelerating and providing new growth support.

Maximum Drop of 53,000 Yuan, BYD Launches New Round of Price War

In late May this year, BYD initiated a new round of price cuts, with some models seeing reductions of up to 34%, prompting competitors like Leapmotor and Geely to quickly follow suit.

At that time, BYD announced a large-scale price reduction promotion, involving a total of 22 intelligent driving version models from the Dynasty and Ocean series. Among them, the Dolphin 07DM-i intelligent driving version saw the most astonishing price drop, with a limited-time price of 102,800 Yuan, a direct reduction of 53,000 Yuan from the guide price, representing a drop of 34%.

The Ocean series has 10 models available at a limited-time "one price" starting at 55,800 Yuan, while the Dynasty series has 12 intelligent driving version models with a starting price after subsidies dropping to 63,800 Yuan. This price level has already reached the 60,000 Yuan range, directly impacting the price bottom line of traditional fuel vehicles.

This marks BYD's third promotional campaign in less than two months and the third large-scale promotion this year. From the price cuts on non-intelligent driving entry models at the end of March, to the intelligent driving version replacement subsidies in early May, and now this most extensive and forceful limited-time subsidy, BYD's price reduction strategy is intensifying.

Stock Prices and Sales Move in Opposite Directions

BYD's "internal price war" has supported sales on one hand but has severely hurt the company's stock price on the other.

BYD's Hong Kong stock fell more than 4% during trading today, continuing last week's decline of over 15%.

Citigroup analysts estimate that after BYD's price cuts, its dealer foot traffic may surge by 30% to 40% month-on-month. However, whether this strategy of exchanging price for volume can be sustained has become a focal point of market attention.

Wall Street investment banks are cautious. Goldman Sachs analyst Shubham Ghosh advised clients to sell BYD.

BYD's cumulative sales this year have reached 1.76 million units, still a significant gap from the annual target of 5.5 million units. Morgan Stanley analyst Tim Hsiao and others estimate that to achieve this target, BYD needs to sell an average of about 534,000 units per month in the remaining months.

As the traditional sales peak season in the fourth quarter approaches, whether BYD can withstand pressure and maintain growth momentum will be a new test for this leading enterprise.

People's Daily Commentary: The "Price War" Stimulant for New Energy Vehicles Must Not Be Used

An article in the People's Daily pointed out that in response to the recent new round of "price wars" initiated by car companies, the China Association of Automobile Manufacturers issued an initiative on "Maintaining Fair Competition Order and Promoting Healthy Development of the Industry," clearly expressing opposition.

The Ministry of Industry and Information Technology also expressed support for the initiative, emphasizing that “there are no winners in a ‘price war’, and there is no future.” This clear signal and resolute attitude have timely put the brakes on the disorderly "price war." One must not distort business logic under the coercion of capital, only pursuing short-term market value and stock prices through price wars. Otherwise, when capital cashes out and exits, the industry will be left with nothing but a hollow shell of "losing money to make a noise," and the process of going overseas will also be delayed