[Report] "Crisis? We Don't Care"... Inside BYD's Shenzhen Headquarters

Visit to BYD Headquarters in Shenzhen on June 24
A Calm Atmosphere Contrasts with "Crisis Rumors"
Monthly Sales Double Thanks to Aggressive Discounts
Concerns Over Oversupply and Fierce Competition in China's EV Market
BYD Expands Market Share with Technological and Cost Competitiveness

On June 24 (local time), the headquarters of BYD in Shenzhen, Guangdong Province, China. This site serves as BYD's "control tower," housing the global strategy headquarters, design center, and R&D divisions, where about 30,000 employees work. The imposing main gate spanning a five-lane road conveyed the stature of the world's top electric vehicle manufacturer. Behind the intimidating entrance, dozens of buildings stretched endlessly, and about 8 kilometers from the main building, construction was underway for a new headquarters set to open next year.

Main entrance of BYD headquarters located in Pingshan District, Shenzhen, China. Photo by Woo Suyeon

At the reception desk located at the main entrance of BYD headquarters, partners and clients are waiting for visitor approval for a business meeting. Photo by Suyeon Woo

The main entrance lobby, visited at 9 a.m. on a weekday, was bustling with visitors who had come to BYD headquarters for business meetings. Employees in various uniforms from American semiconductor companies, Chinese automotive parts suppliers, and electric vehicle manufacturers were waiting to receive entry approval. Inside the main building, dozens of Chinese dealership sales staff were taking commemorative photos in the brand exhibition hall after finishing their training. More than ten meeting rooms lined along one corridor on the first floor were fully booked with meetings involving partners and clients from around the world.

In the large plaza in front of the headquarters, small-scale test drives of BYD's premium brand vehicles, such as Yangwang and Denza, were taking place. In one section of the brand promotion hall, a battery penetration test demonstrating the fire safety of the BYD Blade Battery was underway. The atmosphere at BYD headquarters that day seemed completely unrelated to recent foreign media reports mentioning terms like "Chinese electric vehicle restructuring" or "BYD liquidity crisis." A BYD employee encountered at the headquarters said, "No one internally is concerned about rumors of a liquidity crisis," adding, "What is far more serious is the overheated competition in the Chinese electric vehicle market."

BYD store located in Longhua District, Shenzhen, China. Photo by Woo Suyeon

No sense of crisis was detected at the BYD showroom visited the following afternoon in Longhua District, Shenzhen. Large promotional banners for a major discount event that began in mid-June covered an entire wall, with discounts ranging from 10,000 yuan to 25,000 yuan. Considering that the domestic price of BYD's most affordable small electric hatchback, the Seagull, was around 70,000 yuan (about 13 million won), the discount rates by model ranged from as low as 20% to as high as 34%.

In one corner of the store, an influencer was conducting a live broadcast promoting the discounted electric vehicles. In China, selling cars via live commerce has already become commonplace. A BYD dealership representative explained, "This discount is a promotional event to commemorate the '6·18 Shopping Festival,'" adding, "Sales revenue over the past two weeks has more than doubled compared to the previous month thanks to the discount event." While BYD insists that this price reduction is merely a marketing activity, the industry views it as an aggressive strategy to survive in the fiercely competitive Chinese market.

A promotional billboard for an ongoing campaign until the end of June is displayed inside the BYD dealership located in Longhua District, Shenzhen, China. Photo by Su Yeon Woo

Recently, concerns about a crisis stemming from oversupply have been spreading in the Chinese electric vehicle market. Hundreds of electric vehicle companies have sprung up rapidly, fueled by subsidies, leading to redundant investments in production facilities. Goldman Sachs projects that by the end of this year, the production capacity for new energy vehicles in China will reach 25 million units. In contrast, actual production last year was 12.88 million units, and sales reached 12.86 million units.

Excessive facility investment relative to market demand has resulted in accumulated inventory. Some manufacturers and dealers have exacerbated the problem by registering new vehicles and then immediately transferring them to the used car market to inflate sales figures. According to the China Passenger Car Association, passenger car inventory in China reached 3.5 million units in April, the highest since December 2023.

To clear accumulated inventory, companies have entered into a price-cutting competition. In particular, as BYD, the market leader, implemented price reductions of up to 34% last month, some analysts believe a full-scale "chicken game" has begun in the Chinese electric vehicle market. Although the Chinese government has intervened directly to curb excessive price competition and the situation has temporarily stabilized, there is growing consensus that restructuring among the numerous Chinese electric vehicle companies is inevitable to enhance the overall stability of the industry. However, BYD, with its dominant technology and market leadership, remains far removed from the restructuring process.