BYD and Chinese electric vehicles slide despite rising UK demand

Despite a surge in interest from UK consumers, shares in Chinese electric vehicle (EV) manufacturers took a hit on Monday as industry giant BYD announced a series of price cuts, intensifying an already fierce market competition.

Hong Kong-listed BYD saw its shares fall by up to 8.25 per cent from a record high set the previous week, following a weekend announcement of price reductions on 22 electric and plug-in hybrid models, as reported by City AM.

The most significant reduction, a 34 per cent discount, was applied to one plug-in hybrid model, slashing its price by RMB 53,000 (£5,423) to RMB 102,800 (£10,519).

Other Chinese carmakers followed BYD's lead, with state-supported Changan offering a 15 per cent discount on one of its SUVs, while Stellantis-backed Leapmotor also reduced prices by up to 30 per cent on selected models.

This aggressive discounting strategy is part of BYD's 'fixed price' campaign, which runs until the end of next month. Citi analysts predict that this move will boost the company's second-quarter vehicle shipments by up to 30 per cent.

However, this growth comes at the expense of profitability, with BYD's estimated net profit per vehicle for the quarter falling short of its annual target.

Smaller competitors with less robust balance sheets now face a difficult decision: either reduce prices and suffer losses or risk losing market share.

"BYD holds significant pricing power in the market, so each round of its price cuts is set to prompt other car brands to follow suit," stated Li Yanwei of the China Automobile Dealers Association.

UK becomes a bright spot for Chinese EVs

Chinese EV brands are making significant inroads within their domestic market, even as they face stiff competition worldwide.

According to new figures released by Auto Trader, there's been an impressive surge in consumer interest for Chinese EVs, with views on listings hitting over 1.4 million in the first third of the year—jumping from just 1.3% of total views last year to 5.3% currently.

Half of all traffic related to Chinese EVs on Auto Trader was searching for BYD models.

Ian Plummer, Commercial Director at Auto Trader, commented on the findings: "Our research shows a breakthrough for Chinese manufacturers in the UK market over the last 12 months. Chinese electric vehicles are cutting-edge products, backed by affordable battery technology."

UK looks to stay competitive amid trade tensions

As Chinese EV manufacturers present competitively priced offerings, the UK is intensifying efforts to maintain its green credentials.

Prime Minister Keir Starmer has recently unveiled a substantial £2.3 billion investment plan aimed at strengthening domestic EV production and supportive infrastructure. The announcement confirms a ban on the sale of new petrol and diesel vehicles by 2030 and introduces regulatory reliefs alongside tax breaks.

With US President Donald Trump enacting hefty tariffs on imported vehicles and the EU contemplating similar actions, the UK might emerge as a favoured destination for Chinese vehicles.

Plummer also remarked on the current trade climate, "Trade turbulence with the US and EU tariffs is also making the UK relatively more attractive as a market."

He further anticipated greater involvement by Chinese carmakers in the British market.

In March, the UK's EV sales surged by over 40 per cent, solidifying its position as both Europe's and the world's largest EV market.

"This is about future proofing British industry," Starmer stated.

"And delivering change that actually works for working people."