BYD is coming off its best sales month of the year after slashing EV prices in late May. However, it may not be enough, as several sources claim BYD is cutting production in China due to slowing sales.
Why is BYD cutting EV production in China?
With nearly 382,476 new energy vehicles (NEVs) sold globally in May, BYD notched its best sales month of 2025.
Like most carmakers in China, BYD reports monthly NEV sales, which include fully electric vehicles (EVs) and plug-in hybrids (PHEVs).
BYD’s sales are up 39% through the first five months of the year, with over 1.76 million NEVs sold worldwide. Not including its commercial vehicles, BYD’s passenger vehicle sales are up 37% through May, with over 1.73 million units sold.
Its battery-electric vehicles (EVs) are leading the growth, with sales up 40% through the first five months of 2025 compared to the same period last year.
According to a few sources, it may still not be enough as BYD vehicles begin to pile up in China. Two people close to the matter told Reuters on Wednesday that BYD has trimmed production at several factories in China. It’s also reportedly delaying plans to add lines to expand output.
The sources claimed that BYD has cut night shifts and reduced capacity at some plants by at least a third as it faces rising inventory.
Although BYD has yet to confirm, one of the sources reported that at least four BYD plants are now operating at a slower pace.
One source said that the move was aimed at cutting costs and improving efficiency, while the other claimed it was due to BYD failing to meet its sales target.
If true, the claims could be pretty significant, given BYD’s aggressive price cuts last month. On May 23, BYD slashed prices by up to 34% on 22 of its vehicles.
BYD still expects to sell around 5.5 million vehicles this year, a nearly 30% increase from 2024. Last year, BYD sold over 4.72 million NEVs, up 41% from 2023. However, its annual growth rate has slowed over the past few years.
According to data from CnEVPost, BYD’s annual sales growth rate has declined from 218% in 2021 to 208% in 2022 and 62% in 2023.
A survey from the China Automotive Dealer Association last month found that BYD dealers held one of the highest inventory levels, with an average of 3.21 months. In comparison, the industry-wide average was 1.38 months.
Electrek’s Take
With an intensifying EV price war and a wave of low-cost domestic cars flooding the market, Chinese automakers, including BYD, are now looking overseas to drive growth.
BYD is coming off its sixth straight month with record overseas sales in May after selling over 89,000 NEVs outside of China.
After it topped Tesla in monthly vehicle registrations in Europe and the UK this year, BYD launched its most affordable EV earlier this month. The Dolphin Surf is the European version of its top-selling Seagull EV, which can be bought for under $8,000 in China right now.
BYD’s Dolphin Surf arrives as one of the most affordable vehicles in the UK, starting at just £18,650 (about $25,000).
During the launch event, BYD’s special advisor for Europe, Alfredo Altavilla, called (via Autocar) the Dolphin Surf “the missing piece in the A/B-segment.”
According to Altavilla, BYD is launching vehicles in Europe at a faster rate than any other carmaker. “I have zero problem in saying I don’t think there has ever been such a product offensive done in Europe as the one BYD is doing,” he said during the event.
BYD’s sales are expected to double in Europe this year to around 186,000 units. By 2029, S&P Global Mobility forecasts BYD’s sales could reach around 400,000 in Europe. Between its new plants in Hungary and Turkey, BYD is expected to have a combined annual production capacity of over 500,000 units.
And Europe is just one global market. BYD is already a leading EV brand in overseas markets like Brazil, Thailand, Australia, and several other key markets.
Even if the sources’ claims that BYD is cutting production in China are true, the world’s leading EV maker is still expected to see significant growth overseas over the next few years.
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