BYD Slows EV Production and Halts Expansion Plans, Claims Reuters

BYD, the world’s top-selling new energy vehicle manufacturer, is reportedly scaling back production and pausing expansion efforts at several of its Chinese factories. The move follows a period of rapid growth and comes as the automaker faces rising inventory levels and intensifying competition in the Chinese EV market.

Output Cuts On Four Factories

Sources familiar with the matter claimed that the company reduced output by at least a third at multiple sites. Plans to install new production lines have reportedly been shelved temporarily as well.

According to two sources who spoke to Reuters anonymously, at least four BYD factories have been affected by the development, and some night shifts have been removed entirely. While the full scope of the reduction is unclear, one source suggested the changes were introduced as a cost-saving measure, while the other suggested that they were driven by low sales figures.

BYD, which delivered 4.27 million vehicles in 2023, had set an ambitious sales target of 5.5 million units for 2024. However, recent data from the China Association of Automobile Manufacturers shows a notable slowdown in production growth at just 13% year-on-year in April and 0.2% in May. These figures mark the slowest growth since February 2024, when output was affected by China’s Lunar New Year holiday.

Near Term Pressures on BYD

Shares in BYD, listed in Hong Kong, fell nearly 1% in late Wednesday after news of the company’s alleged production cuts emerged. The slowdown marks a significant shift for the company, which had been ramping up capacity throughout much of 2023 and early 2024.

While it remains to be seen how long the scaled-back operations will last, the development suggests a more cautious near-term strategy from BYD as it navigates a maturing domestic electric vehicle market, both in its home country of China and abroad.

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