Catenaa, Monday, May 26, 2025- China automakers stocks fell on Monday after industry leader BYD offered fresh incentives on over 20 models and Great Wall Motors CEO warned that the world’s largest auto industry was in an unhealthy state.
The Hong Kong-listed shares of BYD closed 8.6% lower, while Geely Auto fell 9.5%. Others, such as Nio and Leapmotor, closed between 3% and 8.5% lower.
A years-long price war in the world’s largest automotive market has only continued to intensify, with carmakers continuing to cut prices and offer features previously perceived as premium, such as smart assisted driving, for free.
Chinese electric vehicle giant BYD over the weekend announced a fresh round of subsidies and incentives for more than 20 models, which reduced the starting price of its cheapest model, the pure battery-powered Seagull hatchback, to 55,800 yuan or $7,765.
On Friday, Wei Jianjun, the Chairman of Great Wall Motor, warned that the Chinese automobile industry had its own “Evergrande”, referring to the debt-laden developer that became the centre of a liquidity crisis in China’s property sector.
“Now, Evergrande in the automobile industry already exists, but it has not collapsed,” he told Sina Finance in an interview.
He did not name any automakers but said some of the “main manufacturers” in China had put too much effort into pursuing market value and raising their stock prices.
Wei said that the Chinese electric vehicle industry was in an unhealthy state, given its heavy losses and how a prolonged price war was weighing on the supply chain.
Suppliers were struggling to survive, he added, due to an ongoing pressure to lower prices and delayed payments, and accused carmakers of cutting corners on safety and reliability.
Hong Kong’s Hang Seng Index was down by 1.35% on Monday, and has lost all its gains from last week, but the index is still up by 16% so far in the year.
