BEIJING, February 28 (TMTPOST)— China’s top electric vehicle (EV) company BYD Co., began to follow suit after the price war was ignited by its major rival Tesla and exaggerated by other Chinese peers.

Source: Visual China

BYD has lowered prices of Dynasty Series sold in China, starting its first round of price cuts this year, Shanghai Securities Journal, the state-owned national newspaper, learned from retail stores in different regions including Shanghai. Buyers of some popular models now can enjoy several- thousand-yuan discounts, staff at a sales store in Minhang district, Shanghai, confirmed to the paper. And according to salesperson at the Dynasty showroom in Beijing, the price of 2021 version of BYD’s flagship Han was dropped by RMB20,000  (US$2,885) the 2021 version of another EV model Qin down by RMB15,000, and the store can offer the discount between RMB6,000 to RMB8,000 for purchases of latest version.  

It is notable that BYD has not officially announced any price cuts yet. The abovementioned discounts were made for inventory clearance, salesperson explained to Shanghai Securities Journal. Besides indirect price cuts, BYD also will launch a new brand by the end of the year, the paper cited insiders on Monday. Dubbing as “F Brand” inside BYD, the new brand is said to be a stylish and fashionable one, under which are hybrid electric vehicles, similar with Tank 300, a mid-size SUV produced by Chinese automaker Great Wall Motors.

Tesla’s massive cuts turned Model 3 and Model Y, its two flagship models in China, into direct competition with Han and Tang, BYD’s two popular models in Dynasty series, and BYD had to respond with the same move for it has witnessed decline in sales in short term since Tesla’s cuts nearly two months ago, analysts in the auto industry pointed out. However, BYD can better absorb shocks from price cuts than many EV startups in China for it also makes EV batteries and has a large profit margin, analysts noted.

Tesla slashed price by up to 13% in China on January 6, its second promotion through direct cuts in more than two months. The starting price of Model Y and Model 3 sold in China accordingly were down to new low, about 43% and 30% cheaper than those on sale in U.S. Soon after the move, Tesla lowered prices across the U.S. Europe, the Middle East and Africa by as much as 20% on January 12, expanding its price war globally.

A day after Tesla’s further cuts, Chinese automaker Seres Group announced to trim prices by RMB 30,000 for two SUV EV models co-developed with Huawei. The starting price of Aito M5 and Aito M7 was downed to RMB259,800 and RMB289,800 respectively. In less than a week, Xpeng announced to offer a new round of price cuts between RMB20,000to RMB36,000 for three EV models including P5, P7 and G3i, representing a slash range between about 10% to nearly 13%.

In the beginning of February, Nio Inc. was reported to offer massive price cuts up to RMB100,000 for versions of ES6 and ES8 updated in 2022. Nio is near to update its 2022 versions of ES6, ES8 and EC6, and buyers of these models in stock and on display at the exhibition, though a small number, can enjoy special promotions for vehicles at the auto show under the company’s policy, an official at the EV manufacturer later clarified.