BYD cuts premium prices by 17.3%, opening new front in China’s EV discount war

All variants of the Bao 5 electric SUV saw price cuts of 50,000 yuan (US$6,883), representing a reduction of between 14.2 per cent and 17.3 per cent.

“Premium” refers to the category of vehicles priced above 250,000 yuan in China.Fang Cheng Bao, priced between 289,800 and 352,800 yuan before the current discounts, is one of the carmaker’s top brands after the flagship Yangwang marque.

Fang Cheng Bao, established by BYD last year, began delivering the first model to mainland customers in November.

It is the latest model to be included in BYD’s low-price strategy, which the Shenzhen-based company launched in February to challenge conventional carmakers amid an acceleration in the pace of electrification.

On February 19, BYD fired the first salvo in the discount war, pricing the basic edition of its plug-in hybrid model – the Qin Plus DM-i – at 79,800 yuan, 20 per cent below its earlier quotation. It has since cut prices on nearly all its models by 5 to 20 per cent.

“The latest price cuts offered by BYD dashed hopes of an end to the price war,” said Zhao Zhen, a sales director with Shanghai-based dealer Wan Zhuo Auto. “As a market leader, BYD’s pricing strategy has a huge impact on the market and will force its domestic rivals to follow suit because they will otherwise lose market share.”

In mid-July, BMW dealers stopped offering discounts and incentives as the German carmaker exited the price war to focus on profitability.

Price increases, ranging from 30,000 yuan to 50,000 yuan, became effective after BMW failed to effectively bolster deliveries owing to mainland consumers’ lack of interest in premium models, its dealers said.

Despite the price reductions, BMW reported a year-on-year decline of 4.2 per cent in deliveries to 375,900 vehicles in China during the first half of 2024. This is in contrast with the 2.3 per cent gain in its global deliveries.

Technically, the German carmaker cannot directly instruct its dealers across China to adjust retail prices, but it can pass its pricing strategy onto the outlets by offering them subsidies or increasing sales commissions.

Last August, BYD launched the Fang Cheng Bao brand to take on premium brands like Toyota’s Prado, Land Rover and Porsche.

Wang Chuanfu, founder and chairman of BYD, said at that time that the new brand would offer electric off-road-capable SUVs and sports cars.

BYD reported sales of 1.61 million pure electric and plug-in hybrid vehicles in the first half of 2024, up 28.5 per cent year on year.