BYD, the world’s largest EV maker, is quietly tapping the brakes. After years of explosive growth, the Chinese automaker is now slowing production and pausing expansion at several of its factories across China.
According to two sources familiar with the matter, BYD has cut night shifts and scaled back output at least one-third in some plants. At least four factories have been impacted. It has also halted plans for new production lines — a sign that rising inventories and weakening domestic sales are catching up with the company.
This slowdown comes despite BYD selling over 4.27 million vehicles last year, with a goal of hitting 5.5 million in 2025. But reality is setting in. A deep price war in China’s EV market is eating into margins, inflating inventories, and pushing dealers to the edge.
In May, a large BYD dealer in Shandong province shut down, leaving over 20 stores deserted. Inventory has piled up too — with BYD dealers sitting on a 3.21-month stockpile, the highest of any brand in China. In contrast, the industry average is just 1.38 months.
This overstock is not just bad news for BYD. It’s hurting the entire EV ecosystem. The China Auto Dealers Chamber of Commerce recently urged automakers to stop dumping unsold cars onto dealerships and instead match production to real demand. Many dealers are now asking for cashback payouts within 30 days to survive the cash crunch.
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Meanwhile, data from the China Association of Automobile Manufacturers shows BYD’s production grew only 0.2% year-on-year in May — the slowest pace since early 2024.
So, what’s BYD’s next move?
With the domestic market cooling, BYD is betting big on exports. In the first five months of this year, 20% of its 1.76 million sales came from outside China. Overseas markets may become BYD’s lifeline as it battles homegrown challenges.
Still, the slowdown marks a shift for the once-unstoppable brand that overtook Tesla in global EV sales. Cutting prices to stay competitive has helped short-term, but long-term pressure is mounting — on margins, supply chains, and dealer relations.
Regulators are now keeping a closer eye. Chinese authorities have stepped in, warning against unsustainable price wars that risk hollowing out the entire industry.
BYD may still be on top, but the road ahead just got a lot bumpier.
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