Summary
Shares of Chinese electric vehicle (EV) maker BYD fell by up to 8% after the company reported a drop in profit due to intense price competition in China's car market. The company's profits between April and June decreased by 30% from the previous year. BYD is facing stiff competition from other EV makers like Tesla, Nio, and XPeng, all of which have reduced prices to attract buyers.
Key Facts
- BYD shares dropped by up to 8% on Monday due to a reported decline in profit.
- The company's net profit fell to 6.4 billion yuan ($900 million) between April and June, a 30% decrease from the prior year.
- A price war among China's EV brands is harming the industry, including BYD.
- BYD competes with local rivals Nio, XPeng, and US automaker Tesla, who have cut prices.
- BYD's stock initially fell in Hong Kong but recovered slightly during the day.
- The Chinese government has warned automakers against aggressive discounts to protect the economy.
- Average car prices in China have decreased by 19% over two years, now around 165,000 yuan ($23,100).
- Despite selling 2.49 million cars by end of July, BYD's yearly target is 5.5 million.
