EV Price War Erupts: BYD and Geely Trade Blows as Profit Margins Collapse in China’s Hottest Auto Forum
Top Chinese EV leaders face-off in Chongqing. Price cuts, public spats and plunging profits leave the industry more divided than ever in 2025.
- 60+ EV models discounted in first four months of 2025
- Profit margins plummet: 8.99% (2014) → 3.9% (Q1 2025)
- Over 40% EV market penetration in China, the world’s largest auto market
- Tesla sales drop 36% year-on-year in Europe Q1 2025
The 2025 Chongqing Auto Forum wasn’t just a display of China’s latest electric vehicles. It turned into an all-out verbal brawl between industry titans, with senior executives from BYD and Geely igniting public fireworks rarely seen in such a high-profile setting.
What began as a discussion on price wars devolved into fierce accusations and counterattacks, signaling an industry on the brink.
The Gloves Come Off: BYD and Geely’s Public Tensions Hit Boiling Point
BYD’s Li Yunfei unleashed a fiery critique, denouncing rivals for using “dirty tricks and coordinated smear campaigns” to sway public opinion. The message was clear: the days of industry-wide harmony are gone.
Geely’s Victor Young fired back just as sharply, accusing BYD of hypocrisy and demanding strict regulatory oversight rather than emotional appeals. The once-united Chinese EV front now resembles a battleground of distrust and open rivalry.
The rising tension marks a stunning reversal from 2023, when BYD’s chairman famously called for unity among automakers. In 2025, such unity has evaporated, replaced by factions, backroom whispers, and public showdowns.
Toxic Price War: Why Are Margins Vaporizing?
At the heart of the crisis: a relentless price war. More than 60 EV models have slashed prices in just four months, with over 100 branded discounts flooding the market in May. Margins, which stood at a healthy 8.99% in 2014, have crashed to an anemic 3.9% in early 2025.
The China Association of Automobile Manufacturers recently condemned the “deliberate undercutting” tactics, while dealer organizations warned of unsustainable pressure and demands on retail partners.
All this comes as EV penetration in China passes the 40% threshold—now, growth through sheer volume looks less like a winning strategy and more like a dangerous gamble.
EV Execs Sound the Alarm: “Ticking Time Bomb”
Just weeks before Chongqing, Great Wall Motor’s Wei Jianjun called the industry’s trajectory a “ticking time bomb.” Executives from Huawei and Xiaomi joined the fray, trading barbs about fair competition and sustainability.
In contrast, Chery’s Li Xueyong adopted a moderate stance, arguing that fierce rivalry could spur long-term improvements—if firms refocus on innovation and core strengths.
But even tech giants aren’t immune. Tesla’s European sales nosedived 36% in Q1 2025, with Germany and France seeing drops above 60%. The European market, once seen as a Tesla stronghold, is reeling from the same brutal price wars now battering the Chinese mainland.
Q: Are Lower Prices Really Good for EV Buyers?
Industry insiders warn that constant discounting doesn’t always benefit consumers. While short-term deals abound, long-term effects could include fewer choices, less innovation, and riskier financial practices across the sector.
Q: What’s Fueling This Brutal Competition?
Extreme price-slashing is now the strategy of choice to grab market share. Brands are betting big on solid-state battery research and Tesla-style features like autonomous driving—but these investments demand profits that are fast evaporating.
How Can the EV Industry Survive the Price War?
Automakers increasingly agree that government intervention is needed. Regulatory crackdowns may curb the worst abuses, while a renewed focus on product quality, technical innovation, and responsible pricing could help restore stability.
How Should Shoppers Choose During a Price War?
Savvy buyers should prioritize established brands with clear quality assurances and track records of service. Compare not just price, but warranty coverage, after-sales support, and upgrade pathways as technology quickly evolves.
Take Action: Stay Ahead in the New EV Era!
China’s EV superpowers are locked in a winner-takes-all contest—and the fallout will shape car markets worldwide.
EV Survival Checklist:
- Watch for regulatory updates from CAAM and consumer alerts
- Track discounts, but dig deep into brand reliability
- Stay informed about battery tech and self-driving advancements
- Compare long-term costs beyond the sticker price
- Follow industry news on platforms like Reuters and CNN
Eyes on Chongqing: As price wars rage and tempers flare, only the strongest—and smartest—players will survive. Stay tuned for the next move in China’s electric revolution.