BYD slows production in China but accelerates in Europe

The Chinese electric car giant, Byd, is slowing down, but only in China. The world leader in the production of battery electric cars and plug-in hybrids has decided to reduce the pace of production and put the brakes on expansion plans at home, cancelling night shifts at some factories and postponing the start-up of new plants. A decision, confirmed by internal sources, that captures the current climate of the increasingly crowded and competitive Chinese car market. In at least four plants, Byd has reportedly cut production by a third, according to Reuters.

This is not an official announcement, but measures put in place to contain costs and lighten warehouses that are starting to get too full: Byd dealers now have 3.21 months' stock, more than double the industry average (1.38 months). The aggressive strategy that had led the group to overtake Tesla in 2024, with 4.27 million electric vehicles sold globally, is now coming up against an increasingly crowded domestic market. Data from the China Association of Automobile Manufacturers tell of a clear slowdown: +13% in April, just +0.2% in May, the lowest pace recorded since the beginning of the year.

In China, theprice war rages between the dozens of brands present, of which only a dozen are set to survive. In order to consolidate its leadership, BYD had to lower the list price of its cheapest model to 55,800 yuan (about $7,800), triggering a series of reductions even among competitors and putting the entire production and distribution chain under stress. Trade associations have launched an appeal to manufacturers: produce in a 'more reasonable' manner and avoid pouring too many vehicles on to dealers. And some signs of crisis are already emerging: some large BYD dealers have been forced to close.

Nevertheless, analysts at HSBC remain confident and see BYD in a better position than many rivals in this price challenge. June sales have already shown some positive signs, thanks in part to targeted promotional campaigns. But the real strength of the group is the higher margins achieved on exports, which in the first five months of 2025 already accounted for 20% of total sales. And it is precisely the push abroad that is helping BYD to offset the slowdown in the domestic market. Since the last spark of the price war in late May, the Shenzhen giant has lost just over 4% of its value on the Hong Kong Stock Exchange. But since the beginning, the balance is very positive: +46%.

If at home Byd is holding its breath, outside the borders it is tightening the pace. According to forecasts by S&P Global Mobility, Byd is expected to sell around 186,000 vehicles in Europe in 2025. This would represent more than double the sales recorded in 2024, when the estimate was 83,000 units. S&P Global Mobility also predicts that Byd's sales in Europe could reach 400,000 units by 2029. Meanwhile, the group has signed an agreement with the Austrians of Voestalpine for steel for the Hungarian plant in Szeged, the Chinese giant's first European factory, which has been operational since this autumn. By the end of 2025, the group aims to be operating in 29 European countries with over a thousand dealers. And in Budapest, the new European headquarters is under construction, which will also house the continent's first research and development centre.