BYD will take the bread out of the mouths of the European car brands with a new price hike from the turn of the year. This reveals a new email from the Chinese director.
A new e-mail from the deputy director at BYD, He Zhiqi, believes that it suggests that the brand will start a price war at the turn of the year.
According to the email, BYD plans to significantly reduce prices as part of a strategy to strengthen its position in the market. Competitors can expect an aggressive price war that will put pressure on the industry.
In the internal email obtained by Bloomberg, He Zhiqi calls on a supplier to reduce prices by 10 percent from next year.
The email is titled "Cost Reduction Requirements for BYD Passenger Cars 2025" and refers to the new strategy as a "decisive battle" for the brand.
– In order to strengthen the competitiveness of BYD's passenger cars, we need the entire supply chain to cooperate and continue to reduce costs, writes He.
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On the social media Weibo, a spokesperson for BYD has stated that annual price negotiations with suppliers are common practice in the automotive industry.
At the same time, the spokesman acknowledges that BYD has "price reductions as a goal". But he says at the same time that these are not mandatory. However, no comment has been made on the content of the email or whether similar demands have been made to other suppliers.
Several analysts see this as a sign that BYD wants to consolidate its market share at a time when the competition in the market for electric cars is more than fierce.
The Chinese market for electric cars is among the most competitive, and price reductions can be a tool to crush competitors' positions and gain ground.
CNN has attempted to confirm whether the email is authentic. But BYD has not responded to the inquiries. At the same time, the email has received attention because it indicates a change in BYD's strategy, so that price pressure and an actual price war will be decisive.
This development underlines the challenges that characterize the electric car market, where manufacturers are under pressure to find new ways to gain competitive advantages. Jaguar, for example, has chosen to stand off the market for a whole year. Read more about the hotly debated election right here .
