BYD pushes Chinese electric car brands to the brink of oblivion: Latest round of price cuts have EV makers such as Geely and GWM on edge with smaller brands unlikely to survive

China is about to have far fewer electric car brands if BYD gets its way.

The carmaking behemoth triggered a price war in China, which could squeeze out many small and mid-size electric car brands.

BYD’s Executive Vice President, Stellar Li, told Bloomberg consolidation across the Chinese electric car sector was likely as the market matures.

“It’s very extreme, tough competition,” Li said

XPeng has previously said there would be a massive reduction in Chinese electric car brands in the future.

The boss of XPeng’s local importer TrueEV, Jason Clarke, told CarsGuide late last year the word from China is not all new brands will survive.

“There’s more like 200 [EV brands in China], and the chairman of XPeng said only seven will survive. So, he clearly thinks he’s going to be one of them,” he said.

It now appears because of BYD’s dramatic price cuts, this might happen sooner rather than later.

Head honchos of Chinese giants GWM and Geely have both expressed concern at the latest round of price cuts in China.

GWM Chairman, Wei Jianjun, said the industry already has its own Evergrande, referring to the Chinese property developer that faced a multi-billion dollar debt crisis and collapsed amid liquidation.

“If it continues like this, the safety of China’s auto industry will be seriously threatened,” said Mr Wei to Sina Finance in an interview translated to English.

Wei said that not only margins, but quality control could take a hit as a result of price-cutting.

“Some products have been reduced from 220,000 yuan to 120,000 yuan in the past few years,” he said.

“What kind of industrial products can be reduced by 100,000 yuan and still have quality assurance? Well this is absolutely impossible.”

Geely has warned about severe over capacity within the Chinese and global auto industry, and has promised to not build anymore factories.

Even China’s automotive industry ministry weighed in on the price war.

“There are no winners in a price war, let alone a future”, said the China Association of Auto Manufacturers (CAAM), which also alluded to the idea that some cars are being sold below cost.

"Apart from reducing the price of goods according to law, enterprises shall not dump goods at prices below cost," CAAM said, according to Reuters.

BYD has even said it is unsustainable to continue down this path, but has not said it would wind back its aggressive pricing strategy.

“No, it’s not sustainable,” said Li.

So far the price wars are centred in China with the carmakers’ export markets remaining unaffected for now.

The door is always open to increased incentives in global markets as Chinese brands fight for market share and to fulfill their unused production capacity.

Bloomberg has previously reported the Chinese EV sector is using less than 50 per cent of its production capacity.