BYD shares are plummeting: Financial experts warn of ongoing price wars and new competitors such as Huawei

BYD shares are plummeting: Financial experts warn of ongoing price wars and new competitors such as Huawei

According to a report by www.deraktionaer.de,

Electric car maker BYD's shares have lost around 10 percent of their value this week after the company announced it would cut prices for some models. This caused investors to worry about an ongoing price war, declining margins, high inventories among retailers and new competitors such as Huawei. Additionally, UOB Kay Hian analyst Ken Lee lowered his price target for BYD from 630 to 140 Hong Kong dollars due to falling capacity utilization, price cut pressure and piling up inventories.

Analysts at UBS, on the other hand, are less critical of the price cuts and emphasize that they are in line with the deflation in raw materials and are relatively modest compared to other manufacturers. In addition, BYD's costs per vehicle have fallen since the beginning of the year, which continues to make the company attractive.

Considering these facts, BYD's price cuts could have an impact on the market as it could trigger a price war in the electric car industry. This could lead to significant pressure on other companies' margins. In addition, competition from new competitors such as Huawei could further weaken BYD's position.

Overall, the experts' assessment of BYD remains inconsistent. While Ken Lee has drastically lowered his price target, UBS analysts are more optimistic and see potential for BYD through premiumization, export increases, cost optimization and commodity deflation. The further development of the company will therefore depend on various factors that can influence the market and the financial industry.