BYD Slashes Seagull EV Price to £6,100, Triggering Investor Sell-Off and Industry Jitters

Chinese electric vehicle (EV) giant BYD has slashed the price of its popular Seagull hatchback by 20%, intensifying a growing price war that has already rattled stock markets and sparked fears over long-term profitability across the sector.

The move sent shockwaves through China's already oversaturated EV market, causing BYD shares to tumble by over 8% on the Hong Kong Stock Exchange. Other EV makers, including Xpeng, Nio and Geely, also saw their stock prices slide in response.

Seagull EV Now Costs Just £6,100

In a surprise promotional campaign launched this week, BYD dropped the starting price of the Seagull EV from ¥69,800 (£7,700) to just ¥55,800 (approximately £6,100 or $7,750). The discount is set to last until 30 June, targeting price-sensitive customers in lower-income urban areas.

The Seagull, known for its affordability and compact design, has been positioned as a gateway EV for first-time buyers. The aggressive cut makes it one of the cheapest mass-market EVs globally, further pressuring rivals like Geely and Leapmotor to follow suit.

Shareholders Fear Margins Could Collapse

The price cut may be good news for consumers, but investors are alarmed. The significant markdown raised red flags about potential shrinking profit margins and a wider industry slowdown.

'Investors are clearly reacting to concerns that such steep discounts may not be sustainable,' said automotive analyst Karen Liu. 'It signals slowing demand and intensifies the fear of a margin-eroding price war.'

BYD's shares plunged 8.6% following the announcement. Geely dropped by 6.5%, while smaller EV makers such as Li Auto and Xpeng also saw losses between 5–7%.

Analysts Warn of 'Race to the Bottom'

Analysts say BYD's pricing tactics reflect a deeper issue: the Chinese EV market is nearing saturation. Over 100 brands currently compete for buyers, and with demand growth slowing and inventories piling up, companies are scrambling to stay competitive.

'The market is approaching a race to the bottom,' warned David Zhang, a car industry expert based in Shanghai. 'These prices might boost short-term sales, but they will put immense pressure on companies' long-term financial health.'

In April 2025 alone, more than 20 carmakers including Tesla's China division, cut prices or introduced new incentives. Tesla recently dropped prices for its Model 3 in China by around £2,400 ($3,000), but it still remains more expensive than BYD's low-cost options.

Global Ramifications Loom

BYD's strategy could also impact global markets. The company recently overtook Tesla as Europe's top EV seller in April, raising concerns among EU regulators that Chinese automakers, some backed by state subsidies, may distort competition.

The European Commission has already launched an investigation into state support for Chinese EV exports and is considering raising tariffs. Analysts believe continued discounting by BYD may escalate trade tensions between China and the West.

What It Means for the Future of EVs

While BYD's gamble might secure short-term volume gains, it raises urgent questions about the sustainability of the EV sector's business model, especially in China.

The average EV maker in China operates on razor-thin margins. In BYD's case, analysts estimate it earns only a few hundred pounds per vehicle sold, depending on the model. Cutting prices further puts these profits at risk.

Industry insiders worry the current pricing frenzy could result in a shakeout, where smaller or poorly capitalised firms fail to survive.

'Without a shift toward product differentiation or tech innovation, many EV brands risk being priced out of existence,' Liu added.

BYD's dramatic price cut on the Seagull EV has lit a fire under China's hyper-competitive EV sector, triggering an investor sell-off and raising questions about the industry's financial resilience. As the price war deepens, both manufacturers and markets are bracing for further volatility.