Chinese electric automaker BYD has just announced a lower sales growth target for this year amid the intensifying price war and overcapacity issues in Mainland China, local news platform SCMP reports, citing the company’s leader.
BYD boss’ forecast for the year
According to the report, BYD Chairman & President Wang Chuanfu notified investors that the automaker projects this year’s new energy vehicle (NEV) deliveries to hit 3.6 million units during an investors conference earlier this week. Notably, that figure represents a notable 20% increase compared to 2023’s sales record of 3.02 million units.
In addition, the BYD boss expects NEV exports to more than double to 500,000 units in 2024. All these considered, BYD’s 2024 prognoses are indeed optimistic.
However, it must be noted that the mentioned 2024 delivery expectations are only a third of the company’s sales growth compared to the prior year, which hit 62.3%.
BYD’s lower sales growth forecasts this year are largely due to certain market challenges, including weak market sentiment.
“Overall demand for EVs [in China] is set to fall in 2024, as consumers refrain from buying items such as cars due to concerns about job prospects and incomes. A 20% increase will not be easy to achieve, given the current weak market sentiment.”
Zhao Zhen, Shanghai-based car dealer Wan Zhuo Auto Sales Director
Intensifying price war
BYD’s affordable pricing enabled it to dominate not only on its home turf but also in the global market, beating America’s Tesla in the fourth quarter of 2023.
The Chinese electric automaker continued to make electric vehicles accessible to many customers by launching major price cuts across its lineup. In effect, it prompted most of its rivals to follow suit, including XPeng, Zeekr, and SAIC-GM-Wuling, among others.
China Passenger Car Association General Secretary Cui Dongshu stated in February that most automakers were likely to keep launching price cuts as they seek to defend their share in a cutthroat market.
However, these price cuts could apparently affect the per-vehicle margin, according to BYD Chairman & President Wang. Nonetheless, he expects that increasing sales volume can aid the company in upholding its profit growth.
BYD’s sales in Jan-Feb 2024
BYD, the current market leader, delivered a total of 325,706 units in the first two months of the year alone, indicating a year-on-year increase of 2.9%.To further boost this sales figure, BYD launched significant price cuts to all its offerings from 5% to 20%.
Considering the expected sales growth slow down, BYD stalled its construction plans for its new electric vehicle factory in Vietnam. Its closest American rival Tesla is also reportedly cutting EV production capacity at Giga Shanghai in China, which is currently the company’s export hub.
