No end in sight for the EV price war inside China....

No end in sight for the EV price war inside China. https://edition.cnn.com/2024/11/28/business/china-byd-ev-price-war-hnk-intl/index.html

China’s EV price war is so brutal that BYD is trying to pinch its suppliers

Hong KongCNN —

China’s top maker of electric vehicles (EV) wants to pay a lot less for car parts in the new year, a demand that signals there is no end in sight to a vicious price war nor economic gloom marked by lower wages and uncertain prospects.

BYD, Tesla’s main rival, asked a supplier to cut its prices by 10% next year, in widely circulated screenshots of a letter dated Tuesday and signed by He Zhiqi, an executive vice president at the Shenzhen-based company.

“In 2025, while there will be great opportunities in the EV market, market competition will also become more intense, entering a decisive battle and knockout rounds,” he wrote. “In order to enhance the competitiveness of BYD passenger cars, we need the entire supply chain to work together and continue to reduce costs.”

CNN has reached out to BYD for comment and has been unable to independently verify the authenticity of the letter.

However, on Wednesday, Li Yunfei, general manager of branding and public relations at BYD, appeared to acknowledge the letter with a post on his verified account on social media platform Weibo.

“Annual price negotiations with suppliers are a common practice in the car industry,” he wrote. “We set price reduction targets for suppliers. It is not mandatory, and everyone can negotiate.”

For 15 years, China’s car market has been the world’s biggest. But starting two years ago, when Tesla kicked off a price war by slashing prices for its Model 3 and Model Y cars in the country by as much as 9%, it has also become the world’s most competitive, with observers calling it a “life and death race.”

China’s more than 200 EV manufacturers are now grappling with huge oversupply, and experts predict many smaller companies will not survive the fierce competition. It’s not looking more optimistic for makers of vehicles with internal combustion engines either.

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