Chinese EV giant BYD is shaking up the electric vehicle landscape with aggressive price cuts at home—even as it carves out a dominant position in overseas markets like Europe and South America.

Shares of BYD dropped sharply this week, falling over 12% across Monday and Tuesday after the automaker announced sweeping price reductions on 22 of its electric and hybrid models. Investors worry the cuts—some as deep as 34%—signal the start of a new price war in China’s already crowded EV sector. Yet analysts believe the move could fuel a short-term sales surge, potentially offsetting profit margin pressures.

The company slashed prices across its Ocean and Dynasty series until June 30, with the Seal 07 DM-i model receiving a massive ¥53,000 (€6,460) discount. The goal, according to industry watchers, is twofold: stimulate demand amid an economic slowdown and offload a growing backlog of dealer inventory, which ballooned by 150,000 units in early 2025.

While domestic challenges mount, BYD is finding its stride on the global stage. April sales of new energy vehicles (NEVs) reached 380,089 units, up 21% year-on-year. Notably, BYD outsold Tesla in Europe for the first time, registering 7,231 battery-electric vehicles—a 169% annual increase. Tesla’s market share, by contrast, is retreating in the region, hindered by mounting public criticism of CEO Elon Musk’s political affiliations.

BYD’s international strategy is gaining momentum. The automaker is largely shielded from new U.S. tariffs, as it does not sell passenger EVs in North America. Instead, BYD is targeting Southeast Asia, Latin America, and Europe, where it is constructing a major production facility in Hungary to solidify its EU presence.

Financially, BYD remains strong. In Q1 2025, it reported nearly 1 million vehicle sales, ¥9.15 billion (€1.11 billion) in net income, and a healthy 20% profit margin—outpacing Tesla’s $409 million (€359 million) profit and 16% margin. The company’s adoption of DeepSeek’s R1 AI model also positions it as a credible rival in autonomous driving tech.

As the battle for EV dominance intensifies, BYD appears willing to sacrifice short-term returns to secure long-term leadership. With robust international growth and continued innovation, the company is signaling it’s not just following Tesla—it’s challenging it head-on.

Read the full story at Euronews.