BYD Triggers China EV Price War, Regulators Warn of Market Risks

China's largest electric vehicle maker, BYD, has aggressively slashed prices by up to 34% on 22 EV models, with entry-level vehicles now starting at about $7,700. This dramatic price war has caused stock prices of BYD and other Chinese EV companies like Geely, Xpeng, and NIO to plunge, raising concerns over a potential industry crisis similar to the Evergrande collapse due to BYD's high asset-liability ratio. Chinese officials and industry associations have issued warnings about the escalating 'price war panic,' cautioning that such disorderly competition could squeeze profit margins, reduce product quality, and damage the international reputation of "Made-in-China" EV technology. Despite government calls for self-regulation and fair competition, including urging automakers to halt excessive price cuts, executives like Xpeng's CEO predict the competition will intensify further over the next five years. Rival automakers and legacy brands have responded with their own discounts, further fueling the market turmoil and prompting speculation about possible consolidation in the sector. BYD continues to expand sales domestically and internationally, including record overseas NEV sales and new model launches, even as the intense price competition threatens the industry's stability.