(Hong Kong, Mainland China, 22nd July) China’s electric vehicle giant BYD has seen its monthly sales growth stall, raising market doubts about its ability to achieve its full-year sales target.
According to a Bloomberg report on Tuesday (July 22), BYD’s sales in June reached 382,585 units, still leading the industry, but the monthly growth has slowed significantly compared to previous months, with a month-on-month increase of just 0.2%. In the first half of this year, BYD sold a total of 2,145,954 vehicles, up 33% year-on-year.
According to a Bloomberg report on Tuesday (July 22), BYD’s sales in June reached 382,585 units, still leading the industry, but the monthly growth has slowed significantly compared to previous months, with a month-on-month increase of just 0.2%. In the first half of this year, BYD sold a total of 2,145,954 vehicles, up 33% year-on-year.
Despite the strong performance in the first half, compared to the annual sales target of 5.5 million vehicles, BYD has completed only 39% of its full-year target in the first six months. This means that it still needs to sell about 3.36 million vehicles in the second half of the year, or an average of 560,000 units per month. Compared to BYD’s June sales, this is still nearly 180,000 units short per month.
However, BYD’s monthly sales growth has already stalled in recent months, and the summer season is traditionally a weak period for car consumption, making it unlikely that this trend will reverse in the short term.
In addition, after excluding overseas and commercial vehicle sales, BYD’s core passenger car deliveries in China have been continuously shrinking. In June, BYD’s sales in China dropped 8% year-on-year, reflecting that consumers are increasingly favoring competitors such as Geely, NIO, and Xiaomi.
According to HSBC Holdings data, Geely’s market share grew the most in the first half of this year, while BYD was among the enterprises with the steepest decline in market share.
Bloomberg, citing analysts, reported that BYD may not achieve the 5.5 million annual sales target, and the market is revising down its expectations. Earlier this month, Deutsche Bank forecast that BYD’s wholesale sales would total 5 million units this year, with 4 million units coming from the domestic market and 1 million from overseas.
Morgan Stanley last month lowered its estimate to 5.3 million units, citing a reduced number of new model launches.
Bloomberg Industry Research analysts said that if BYD wants to maintain its current trajectory, it will need to make concessions on profit in the second half by continuing to offer substantial discounts.
However, the Chinese government is increasingly concerned about competitive behaviors such as price wars. Last week, Chinese authorities convened two consecutive days of meetings regarding the new energy vehicle industry, urging the sector to deeply recognize the extreme importance of irrational competition problems, to standardize competitive order, and for automakers—especially industry leaders—to compete legally and rationally.
Bloomberg noted that this reflects a hope from Chinese regulators to reduce deflationary effects caused by price wars in order to avoid jeopardizing economic and industrial growth. Nevertheless, there are widespread doubts as to whether Beijing can really stop a private enterprise from engaging in price wars.
The China Program Coordinator at the Peterson Institute for International Economics analyzed that Chinese authorities might use administrative means to establish a de facto price floor, such as conducting cost investigations or price reviews, or even coordinating leading car companies to cut production together. However, he admitted that these measures will be difficult to implement.
BYD is scheduled to announce its interim financial report late next month and release July sales data in the coming weeks, at which time analysts will examine whether BYD’s 2025 target is becoming increasingly out of reach.
However, BYD’s monthly sales growth has already stalled in recent months, and the summer season is traditionally a weak period for car consumption, making it unlikely that this trend will reverse in the short term.
In addition, after excluding overseas and commercial vehicle sales, BYD’s core passenger car deliveries in China have been continuously shrinking. In June, BYD’s sales in China dropped 8% year-on-year, reflecting that consumers are increasingly favoring competitors such as Geely, NIO, and Xiaomi.
According to HSBC Holdings data, Geely’s market share grew the most in the first half of this year, while BYD was among the enterprises with the steepest decline in market share.
Bloomberg, citing analysts, reported that BYD may not achieve the 5.5 million annual sales target, and the market is revising down its expectations. Earlier this month, Deutsche Bank forecast that BYD’s wholesale sales would total 5 million units this year, with 4 million units coming from the domestic market and 1 million from overseas.
Morgan Stanley last month lowered its estimate to 5.3 million units, citing a reduced number of new model launches.
Bloomberg Industry Research analysts said that if BYD wants to maintain its current trajectory, it will need to make concessions on profit in the second half by continuing to offer substantial discounts.
However, the Chinese government is increasingly concerned about competitive behaviors such as price wars. Last week, Chinese authorities convened two consecutive days of meetings regarding the new energy vehicle industry, urging the sector to deeply recognize the extreme importance of irrational competition problems, to standardize competitive order, and for automakers—especially industry leaders—to compete legally and rationally.
Bloomberg noted that this reflects a hope from Chinese regulators to reduce deflationary effects caused by price wars in order to avoid jeopardizing economic and industrial growth. Nevertheless, there are widespread doubts as to whether Beijing can really stop a private enterprise from engaging in price wars.
The China Program Coordinator at the Peterson Institute for International Economics analyzed that Chinese authorities might use administrative means to establish a de facto price floor, such as conducting cost investigations or price reviews, or even coordinating leading car companies to cut production together. However, he admitted that these measures will be difficult to implement.
BYD is scheduled to announce its interim financial report late next month and release July sales data in the coming weeks, at which time analysts will examine whether BYD’s 2025 target is becoming increasingly out of reach.