BYD is asking its suppliers to reduce their prices, in a sign that a brutal price war in China, the world’s biggest auto market, is about to intensify.
Citing a leaked email from BYD dated Nov. 26, Chinese news outlet thepaper.cn reported on Wednesday that the Chinese electric vehicle maker asked an unnamed supplier to reduce its prices by 10% from Nov. 1. January.
Reuters was unable to verify the email, screenshots of which were widely shared on social media. BYD did not respond to a request for comment.
However, a BYD executive said Wednesday on his Weibo account that the Chinese automaker sets price reduction targets for suppliers when making large-scale purchases. These targets are negotiable and non-binding, he added.
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“Annual price negotiations with suppliers are a common practice in the automotive industry,” said BYD Brand and Public Relations Department General Manager Li Yunfei in his post. He did not refer to the leaked email.
BYD has been promoting several discounts on the prices of its vehicles since the war with Tesla began last year. That aggressive stance has helped it unseat its U.S. rival as the world’s biggest seller of electric vehicles, even though the majority of BYD’s cars are sold in China.
BYD topped China’s auto sales rankings with a 15.8% share of the overall market in the first nine months.
Last year, the automaker was second only to the combined sales of Volkswagen’s two joint ventures in China.
