EV Maker BYD Has Been Gaining Market Share over Tesla. As a Result of Price Cuts, Its Shares Are Tanking

Shares of Chinese electric vehicle giant BYD Co. dropped sharply on Monday following the announcement of price reductions on several of its car models. The automaker, which has been steadily taking market share from Tesla, saw its Hong Kong-listed stock fall 8.5% during the session. Despite the decline, BYD’s stock is still up 59% so far in 2025, while Tesla shares have lost 15% over the same period.

‍

The decline in BYD’s shares came after the company revealed summer discounts on multiple vehicle models in a post on Chinese social media platform Weibo dated May 23. One of the most notable reductions included the compact Seagull Smart Driving Edition hatchback, which dropped in price from 69,800 yuan (around $9,688) to 55,800 yuan (roughly $7,656).

‍

Other Chinese automakers also saw their stocks take a hit in response to BYD’s aggressive pricing strategy. Shares of Li Auto fell more than 3%, while Geely Automobile plunged 9% and Great Wall Motor dropped 8%. Analysts expect that BYD’s competitors will likely feel pressure to follow suit and lower their own prices in order to remain competitive.

‍

According to a client note from Citi analysts led by Jeff Chung, the price cuts have already resulted in a noticeable boost in consumer interest. Dealership visits for BYD reportedly rose between 30% to 40% over the weekend following the announcement. The surge in foot traffic indicates that price sensitivity remains a major factor for consumers in the EV space, especially in China’s highly competitive auto market.

‍

The price cuts come at a time when BYD is gaining significant traction in international markets. In April, the company surpassed Tesla in battery-electric vehicle (BEV) sales in Europe for the first time, based on data from automotive research firm JATO Dynamics. BYD registered 7,231 BEVs in Europe during that month — a 169% increase compared to the previous year — while Tesla’s registrations dropped 49% year-over-year to 7,165 vehicles.

‍

BYD has made inroads in specific European markets as well, surpassing long-standing brands like Fiat in Spain, France, and the U.K., and overtaking Seat in Italy. Tesla, on the other hand, has been struggling to maintain its footing in Europe this year. Some observers point to political controversies involving CEO Elon Musk, particularly his public support for former U.S. President Donald Trump, as a factor impacting European consumer sentiment. Others note that Tesla’s recent update to the Model Y may have disrupted sales momentum.

‍

While Europe is not Tesla’s primary market, the company is also contending with challenges in the U.S. and China — its second-largest market. Growing competition and shifting consumer preferences have weighed on Tesla’s performance, while BYD continues to solidify its status as a global contender in the EV race.

‍

UBS analysts, led by Patrick Hummel, emphasized this dynamic in a May 23 research note, stating that Tesla has become “the biggest loser” in the evolving EV landscape. The analysts highlighted BYD as the only Chinese original equipment manufacturer (OEM) that has managed to establish a truly global footprint, despite increasing international trade barriers.

‍

They also warned that Tesla is not just losing market share in Europe, but also experiencing setbacks in China — a market that is critical to the company’s growth strategy.

‍

In contrast, some analysts are still optimistic about Tesla’s future. On Friday, Wedbush Securities raised its price target on Tesla stock from $350 to $500 per share. Analysts Dan Ives and Sam Brandeis cited renewed focus from Elon Musk as a positive sign, suggesting the company may be turning a corner after a rocky start to the year.

‍

According to the Wedbush team, a major driver of future growth lies in Tesla’s autonomous driving ambitions. They believe the company’s upcoming event in June, where it plans to unveil its latest self-driving technology in Austin, Texas, could mark the beginning of a new growth phase. Ives and Brandeis wrote that the majority of Tesla’s valuation upside hinges on the successful execution of its autonomous driving roadmap, which has long been one of Musk’s most ambitious goals.

‍

Still, BYD’s latest price moves underline the intensity of competition in the electric vehicle sector, especially in China, the world’s largest EV market. As more players seek to cut prices and expand their global presence, the battle for dominance between BYD, Tesla, and other automakers is only expected to intensify — with consumers potentially benefiting the most in the form of more affordable electric cars.

‍