In a recent event, BYD Chairman Wang Chuan-fu said that China’s NEV market is about to enter a “brutal knockout stage” after its intense price war last year.
Looking back on 2025
Wang spoke at BYD’s 2025 Annual Results Announcement held last week. Summarising the company’s performance last year, Wang said: “In 2025, as the global landscape evolved at an accelerated pace, the century-long transformation of the global automotive industry entered a critical phase.”
“We also recognise that competition in the NEV industry has reached a fever pitch, and is undergoing a brutal knockout stage,” he noted.
Wang was referring to the intense EV price war China’s NEV market has been undergoing since last year. In the past, industry players have pointed to BYD as the “instigator” of this price war, lowering prices with no announcement or warning as part of its strategy.
Though the strategy initially proved successful for BYD, it prompted competitors to match BYD’s pricing. As the price war intensified, the Chinese government intervened and urged companies to “self-regulate” and prioritise innovation .
According to industry leader He Xiaopeng of XPeng, BYD’s strategy could force newer and smaller market entrants to fold. The price war “could last up to five years and leave just five survivors.”
Results of an aggressive strategy
In terms of profit, the long-term results of BYD’s aggressive strategy have yet to prove successful. In late March, Reuters reported that the EV maker’s net profit fell significantly by 19 per cent – its first decline in four years and well above analysts’ prediction of a 12.1 per cent drop.
Earlier in the year, BYD became the fourth best-selling carmaker in China, dropping from first place in January and February. The brand’s revenue growth also fell to a six-year low of 3.5 per cent despite reducing its workforce by 10.2 per cent in the end of 2025.
Analysts continue to predict a similar performance for the rest of the year. The ongoing price war – which BYD allegedly triggered – continues despite slowing domestic EV demand. While overseas demand for EVs is growing, analysts say it may not be enough to restore BYD’s earnings to previous highs.
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