Chinese electric vehicle (EV) giant BYD has recently slowed its production and expansion pace, cutting shifts at some factories and delaying plans to increase production lines. This move signals a potential slowdown for BYD, which had surpassed Tesla to become the world’s largest EV manufacturer.
Reuters reported that anonymous sources revealed BYD has eliminated night shifts at several factories and reduced production by at least a third. Another insider disclosed that these measures affected at least four factories, with plans for additional production lines also put on hold.
One source attributed these actions to cost-cutting efforts, while another suggested they were prompted by sales falling short of targets.
BYD sold 4.27 million vehicles last year, predominantly in China. The company operates at least seven car factories in the country. It has set an ambitious sales target of 5.5 million vehicles for this year, aiming for a 30% increase over the previous year.
The full extent of the production cuts and their duration remain unclear. However, the news impacted BYD’s stock performance on the Hong Kong exchange, erasing earlier gains of 2.6% and pushing the stock down by about 1%.
Other data also indicate a slowdown in BYD’s production. The China Association of Automobile Manufacturers (CAAM) reports that BYD’s production growth rates for April and May have decelerated to 13% and 0.2% year-over-year, respectively. These figures represent the lowest growth since February 2024, when factories shut down for the week-long Chinese New Year holiday. Average production in April and May was 29% lower than in the fourth quarter of 2024.
Adding to the company’s challenges, state media reported last month that a major BYD dealership in Shandong Province had closed, with at least 20 stores either empty or shuttered.
In a bid to stimulate sales, BYD recently slashed the starting price of its most affordable model to 55,800 CNY (about 7,800 USD). This aggressive pricing strategy has sparked a price war among competitors and triggered a significant sell-off in Chinese automotive stocks.