why can BYD still afford to lower the price?

When electric car prices in China looked like they couldn’t drop, BYD announced its worst price cut ever. It will drop the price of its Seagull EV sedan by 5% to under $10,000. It is one of the few electric car manufacturers that can afford to stay in growth Global electric car price war.

BYD, which last month announced that it was “officially ushering in a new era of low-fuel electricity,” is undercutting nearly every electric and hybrid car model on the market. The biggest drop is a fifth of the price of its best-selling Qin Plus sedan; it now has a starting price of around $11,000, beating traditional leaders VW’s Lavida and Toyota Corolla in the local market.

New competition increases the urgency to cut prices. Local automaker Geely Automobile Holdings set a record for sales of its new energy vehicles last year, helping its earnings beat estimates. Zeekr, the first electric car brand owned by Geely, is looking to go public in the US, which would give it new funding to expand internationally. Electric car rival Xpeng has announced plans to launch an affordable brand, with models set to start at $13,890. (…)