SHANGHAI (Reuters) -BYD Co Ltd on Wednesday cut the starting price of its best-selling Seal sedan by 10%, as the Chinese electric vehicle (EV) giant seeks to extend its lead in the world's largest auto market with lower-priced products.
The company replaced its line-up of the model with five new versions. That includes a rear-wheel drive Seal Champion Edition with a 550-km (342-mile) driving range per charge at a starting price of 189,800 yuan ($27,459). This is 20,000 yuan cheaper than a previous version with the same driving range, according to BYD's website.
The new price is also 18% cheaper than the rear-wheel drive version of Tesla (NASDAQ:TSLA) Inc's Model 3 in China with a driving range of 556 km, which the Seal Champion competes against.
China's EV market is in the midst of a price war started by Tesla earlier this year, with several EV makers including BYD following the U.S. automaker's example by cutting prices for best-selling models this year to defend market share.
"Loss making independent (new energy vehicle) producers are likely to resist further price competitions, but we believe profitable market leaders such as Tesla and BYD still have the pricing flexibility to balance demand and supply - and both companies will continue to expand production capacity aggressively in 2023," Fitch Ratings analysts said in a note on Tuesday.
BYD, China's best-selling electrified vehicle maker, launched the Seal sedan under its Ocean series in July 2022 with a sporty design style and intelligent features.
It sold 19,573 Seal cars in the first quarter, while China sales of the Model 3 totalled 42,782 units in the same period, data from China Passenger Car Association showed.
The EV price war is also drawing sales away from internal combustion engine vehicles as the price gap between the technologies narrows.
BYD has so far led the new energy vehicle (NEV) market with its various offerings of battery-only and plug-in hybrid models priced under 300,000 yuan. At the recent Shanghai autoshow, it hit headlines by unveiling an electric hatchback costing half the price of the cheapest NEVs available elsewhere.
It has outgrown Germany's Volkswagen (ETR:VOWG_p) as the best-selling passenger vehicle brand in China in the last two quarters.
But signs of weaker demand are also appearing as BYD reduced shifts at two of its auto assembly plants in recent weeks, Reuters reported in March.
($1 = 6.9121 Chinese yuan renminbi)