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On Wednesday, a letter started making rounds on Chinese social media platforms, which detailed BYD Passenger Cars’ request for its suppliers to reduce costs by 10% starting from 2025. The author, whose identity was not disclosed in the circulated screenshot, expressed “strong dissatisfaction and formal protest” against this.
The author noted that BYD has achieved considerable expansion in recent years through aggressive cost-cutting strategies. However, the author criticized these practices, stating they not only contravene business ethics but also excessively exploit the viability of domestic suppliers. The author argued that BYD’s “cutthroat pricing” strategy to penetrate international markets is ruthlessly exploiting suppliers, transforming the value generated by Chinese laborers into inexpensive benefits for developed countries. This approach creates a vicious cycle that either exhausts or starves domestic suppliers, potentially even pushing exceptional companies towards bankruptcy and leading the industry into a low-end competition impasse.
The letter further correlated BYD’s aggressive cost-cutting and low-price strategies for international market expansion with the recent tariffs imposed on Chinese electric vehicles by the US and EU, and emphasized, “Once the price competitive advantage is lost, BYD’s so-called ‘success’ will instantly vanish, and all the squeezed profits and value will eventually become the dowry for the economic development of other countries. This shortsighted behavior not only destroys itself but also drags down the entire industry chain, sacrificing the long-term interests of Chinese workers and enterprises.”
In response, the General Manager of BYD Group’s Brand and Public Relations Department posted a brief statement on Weibo on November 27. The statement notes that “annual price negotiations with suppliers are a standard practice in the automotive industry”, and that BYD’s proposed price reduction targets, based on large-scale bulk purchases, are not obligatory and are open to negotiation.
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