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In the wake of another round of substantial price reductions last month, Chinese electric vehicle (EV) manufacturer BYD is facing criticism from top officials and regulators. China's authorities have cautioned that BYD's latest price cuts are inciting a "price war panic," which they believe is escalating uncontrollably.

BYD, renowned for its cost-effective electric cars, recently slashed the price of its top-selling Seagull EV from 69,800 yuan (just under $10,000) to 55,800 yuan (approximately $7,800) as of May 23. This aggressive pricing strategy wasn't limited to the Seagull; the automaker applied hefty discounts, up to 34%, on 22 of its models.

The price cuts have exerted competitive pressure on other automakers, prompting officials in China to express their concerns. The China Automobile Manufacturers Association issued a statement through Bloomberg, warning that one automaker's recent price reductions are igniting a "new round of price war panic." The association emphasized that "disorderly price wars intensify vicious competition, further compressing corporate profit margins."

The warnings have resonated in media reports, which urged automakers to cease the discounts to avoid producing low-quality products. The reports highlighted that slashed prices could tarnish the "Made-in-China" reputation that the nation is striving to establish. Following BYD's price cuts, share prices of several Chinese automakers, including NIO, XPeng, Geely, and Li Auto, have plummeted.

Despite the turmoil, BYD's sales figures indicate robust performance. The company sold almost 377,000 passenger vehicles last month, a 14% increase from May 2024. Overseas sales have also been impressive, with over 89,000 New Energy Vehicles (NEVs) sold, marking six consecutive months of growth. BYD has also expanded its presence in Europe and the UK, launching its low-cost Seagull, rebranded as Dolphin Surf, for 23,000 euros ($26,000) with a WLTP driving range of 220 kilometers (137 miles). An upgraded variant offers a longer range of 507 kilometers (315 miles) for 24,990 euros.

With 204,369 fully electric vehicles delivered in May alone, BYD has sold nearly 816,500 EVs in the first five months of 2025, reflecting a 40% increase compared to the same period last year. As financial reports, sales data, and additional information emerge, the full impact of BYD's price cuts on the leading EV market will become clearer. Stay tuned for further developments.