November 27, 2024 — Recently, an email from BYD requesting a 10% price reduction from its suppliers starting in 2025 has circulated online, drawing significant attention. The email highlights BYD’s strong sales performance and outlines its plans to remain competitive in the increasingly crowded electric vehicle (EV) market.
BYD’s 30th Anniversary Milestone
On November 18, 2024, to coincide with BYD’s 30th anniversary, the company reached a historic milestone by becoming the first automaker in the world to produce its 10 millionth new energy vehicle (NEV). This achievement not only marks a significant moment for BYD but also signals a new phase in China’s automotive industry, showcasing the country’s progress from an automotive powerhouse to a leader in new energy vehicles.
BYD’s growth has been fueled by continued innovation, scalability, and cost-efficient supply chain strategies. In October 2024, the company surpassed 500,000 vehicle sales for the year, and with cumulative sales exceeding 3.25 million units by the end of October, it is on track to exceed 4.2 million units in total sales for the year, marking a 36.5% year-over-year increase.
Innovative Technology and Scale Advantages
The growth in BYD’s sales can be attributed to its focus on technological innovation, large-scale production, and a low-cost supply chain. As one of the world’s largest battery manufacturers and electric vehicle producers, BYD has maintained a competitive edge by prioritizing innovation and capitalizing on its scale to reduce manufacturing costs. This combination has driven BYD’s rapid expansion in the global electric vehicle market.
The Need for Supply Chain Cost Reduction
Given the increasingly fierce competition in the EV sector, BYD’s management has emphasized that 2025 will mark a critical “decisive battle” in the new energy vehicle market, where only the strongest players will survive. To remain competitive, BYD has set a goal to further reduce costs across its supply chain, with a particular focus on lowering prices from its suppliers.
BYD has requested that suppliers reduce prices by 10% on all products starting January 1, 2025. This move is designed to further optimize the cost structure and enable BYD to maintain its competitive edge. The company made it clear that this price reduction is not mandatory but will be negotiated on a case-by-case basis, with suppliers invited to discuss mutually agreeable terms.
Li Yunfei Responds: Price Cut Requests Are Negotiable
Li Yunfei, General Manager of BYD Group’s Brand and Public Relations Department, responded to the news, explaining that annual price negotiations with suppliers are a common practice in the automotive industry. He clarified that the price reduction request was not a forced measure but a goal aligned with BYD’s business objectives. BYD seeks to leverage its large-scale procurement to negotiate better prices, but it is open to discussions with suppliers to reach a mutually beneficial agreement.
Li further emphasized that BYD’s ability to maintain high product quality and technological innovation while reducing costs is due in large part to its longstanding relationships with suppliers. The company remains committed to ensuring the quality of its products while driving down costs, which will help enhance its competitiveness in global markets.
Collaborative Innovation for the Future
As the global EV market accelerates, all major automotive companies are racing to strengthen their electric strategies, intensifying market competition. BYD’s focus on supply chain optimization, collaboration with suppliers, and cost reduction is a crucial step to ensure it remains a leader in the rapidly growing electric vehicle sector.
Looking ahead, BYD will continue to leverage its strong R&D capabilities and innovative technology to drive high-quality growth in the EV industry. With continued collaboration with suppliers, BYD is well-positioned to maintain its leadership in the global new energy vehicle market.
