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Stella Li, the executive vice president of BYD, made a startlingly frank comment that set the stage for what many now view as a drastic industry reset. Her direct statement at the Munich Motor Show that over 100 automakers need to be “pushed out” of the Chinese auto industry wasn’t just a warning. It was a measured assessment of a sector swollen by overcapacity, warped by subsidies, and increasingly choked by internal pricing battles.
Although the word “bloodbath” may sound dramatic, it works incredibly well in the context of the Chinese EV market. Even industry titans like BYD have been exposed by the race to the bottom
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Lessons concerning the fragility of scale when it is not paired with sustainable practices can be drawn from the BYD narrative from a wider social standpoint. Cheap automobiles may excite consumers, but structural inefficiency results from an unchecked competition to cut prices. Furthermore, tiny automakers, some of which are only a few years old, just do not have the cash flow buffers necessary to endure prolonged periods of low margins and growing production costs.
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BYD reported that Sept NEV sales are down 5.52% year-on-year. This marks the first year-on-year decline in BYD’s monthly NEV sales since March 2024, with PHEV sales falling 25.58 percent. BYD sold 71,256 NEVs overseas in September, a year-on-year increase of 115.85 percent but a month-on-month decline of 11.83 percent.
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