BYD: Price reduction again by the end of the year!

The price war in the automotive industry has continued from the beginning of the year to the end.

On December 27, "BYD Auto" officially announced on Weibo that from now until January 26, 2025, there will be a limited-time discount of 10,000 yuan on the Qin PLUS EV Glory Edition, and a limited-time discount on the second-generation Song Pro DM-i, with both models starting at a price of 99,800 yuan after the discount. Additionally, the trade-in subsidies for these two models are up to 25,000 yuan and 24,000 yuan, respectively. Furthermore, BYD has launched a limited-time promotion offering up to 5,000 yuan in full vehicle insurance for the Han and Tang family models.

Previously, on February 19, BYD fired the first shot in the "Year of the Dragon automotive price war" with the Qin PLUS Glory Edition and the Destroyer 05 Glory Edition, which have starting prices of 79,800 yuan. According to statistics from the Passenger Car Market Information Joint Conference of the China Automobile Dealers Association (hereinafter referred to as "Passenger Car Association"), 195 car models have already seen price reductions in the first 11 months of 2024, exceeding the total for the entire year of 2023.

BYD Continues to Lead the Price War

According to "BYD Auto" official Weibo, from now until January 26, 2025, there will be a limited-time discount of 10,000 yuan on the Qin PLUS EV Glory Edition, and a limited-time discount on the second-generation Song Pro DM-i, with both models starting at a price of 99,800 yuan after the discount.

In addition, from December 27, 2024, to January 26, 2025, purchasing models from the Han and Tang family will come with a limited-time offer of up to 5,000 yuan in full vehicle insurance, as well as benefits of "0 down payment, 0 interest, 0 monthly payment" and a maximum trade-in subsidy of 28,000 yuan (including a maximum of 20,000 yuan in national subsidies and 8,000 yuan in BYD subsidies).

![](https://mmbiz-qpic.wscn.net/sz_mmbiz_png/YRdSz9epGVh4iciaXqxoQGibfy73taACx9dMDCRRa7CpRqYdJBibKZgycsq5ymvzGqxXZOr668ftpTOaFpQKmHaicOQ/640? It can be seen that BYD's recent price cuts and promotional activities are concentrated on the Dynasty series models such as Qin, Song, Han, and Tang. In November 2024, BYD's automobile sales reached 506,800 units, a year-on-year increase of 67.2%. Among them, the sales of the BYD Dynasty series reached 253,100 units, accounting for 49.95% of the company's total automobile sales, making it the mainstay of BYD's automobile sales.

In fact, since the beginning of this year, BYD has repeatedly dropped "price bombs" in the automotive market. On February 19, BYD launched the Qin PLUS Honor Edition and the Destroyer 05 Honor Edition, with a starting price of 79,800 yuan, achieving "price reduction without reduction in quantity," triggering a price storm in the market for cars priced below 100,000 yuan. On March 1, BYD launched the Song Pro DM-i with a starting price of 109,800 yuan, entering a new chapter of "electricity cheaper than fuel."

By November, the incident of "BYD bargaining with suppliers" attracted attention. An email titled "Cost Reduction Requirements for BYD Passenger Cars in 2025" indicated that in 2025, competition in the new energy vehicle market would become more intense, entering a "great showdown" and "elimination round." To enhance the competitiveness of BYD's passenger cars, BYD requires the entire supply chain to work together to continuously reduce costs, requesting relevant suppliers to lower the prices of their supplied products by 10% starting from January 1, 2025.

In response, Li Yunfei, General Manager of BYD Group's Brand and Public Relations Department, stated: "Annual negotiations with suppliers are a common practice in the automotive industry. We set price reduction targets for suppliers based on large-scale procurement, which is not a mandatory requirement, and everyone can negotiate and promote."

Dongxing Securities' research report indicated that the new year's price war in the automotive sector would start early, with automakers transferring cost pressures to upstream suppliers.

The "ammunition" for the price cuts comes from BYD's cost control capabilities and high profit resilience. Despite multiple price reductions in 2024, BYD achieved operating revenue of 502.251 billion yuan in the first three quarters, a year-on-year increase of 18.94%, with a net profit of 25.238 billion yuan, a year-on-year increase of 18.12%.

CMB International's research report believes that BYD's profits will continue to maintain resilience in 2025 due to its strong cost reduction capabilities, which may lead a new round of industry price wars.

The scale of automobile price cuts reaches twice that of 2022

In addition to BYD, other car manufacturers such as Tesla are also continuing their price reduction measures. On November 25, Tesla launched a tail payment discount activity, during which from November 25 to December 31, the tail payment for the Tesla Model Y rear-wheel drive version and long-range all-wheel drive version was reduced by 10,000 yuan, starting at a price of 239,900 yuan, and customers could also choose a 5-year interest-free financing plan.

According to data from the Passenger Car Association, the scale of price cuts in the first 11 months of 2024 reached 195 models, exceeding the total of 150 models for the entire year of 2023 and significantly surpassing the total of 95 models for price cuts in 2022 From the perspective of different types of vehicles, in the first 11 months, the average price drop for plug-in hybrid models was 15,000 yuan, a decrease of 8.5%; the average price drop for pure electric vehicle models was 20,000 yuan, a decrease of 10%; the average price drop for extended-range hybrid models was 15,800 yuan, a decrease of 6.1%; and the average price drop for hybrid models was 10,500 yuan, a decrease of 4.3%. Meanwhile, the average price drop for new conventional fuel models and discounted models was 13,400 yuan, with an average price drop rate of 7.3%.

Cui Dongshu, Secretary-General of the Passenger Car Association, stated that from the perspective of the pace of price reductions, the overall price cuts in 2023 were relatively balanced, but the price cuts in March and April 2024 reached an exceptionally strong level. In February, 24 models had price reductions, in March, 53 models had price reductions, and in April, 43 models had price reductions. The number of discounted models from February to April is also an astonishing level compared to historical data, with May, June, and October dropping to a lower level, indicating a temporary end to the price reduction wave.

The price war has also had a significant impact on the automotive retail market. Li Yanwei, a member of the expert committee of the China Automobile Circulation Association, stated that if calculated based on last January's market discounts and the average transaction price of new cars, the overall loss in the automotive retail market in the first 11 months of this year reached 177.6 billion yuan, an increase of 93.1 billion yuan year-on-year. In comparison, the cumulative sales of domestic passenger cars in the first 11 months of this year were 20.78 million units, an increase of 8.5% year-on-year.

In the context of continuous price reductions in the automotive industry, vehicle inventory has been significantly digested. Data from the Passenger Car Association shows that as of the end of November 2024, the national passenger car inventory was 3.2 million units, a decrease of 720,000 units compared to November 2023, and a decrease of 740,000 units compared to November 2022.

Cui Dongshu stated that the passenger car inventory at the end of November 2024, combined with future sales forecasts, supports future sales days at 50 days, which is a significant decrease compared to 72 days in November 2022 and 62 days in November 2023, indicating that the overall inventory pressure in the passenger car industry is not large.

Author of this article: An Yufei, Source: Securities Times, Original Title: "BYD: Price Reduction Again at Year-End!"

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