BYD Company's stock (01211.HK) plunged 9.29% during intraday trading, marking its most significant single-day percentage decline since early April. The sharp drop comes in the wake of the Chinese electric vehicle (EV) giant's announcement of sweeping price cuts across its product lineup.

According to reports, BYD has launched a limited-time promotion offering steep discounts on 22 of its electric and plug-in hybrid models. The promotion, which runs from May 23 to June 30, includes price reductions of up to 35% on some models. For instance, the company's Seagull hatchback, already BYD's most affordable offering, saw its price slashed by 20% to 55,800 yuan ($7,780). The Seal dual-motor hybrid sedan experienced the most substantial cut, with its price reduced by 34% to 102,800 yuan.

Analysts view this aggressive pricing strategy as a response to decelerating growth in EV sales and broader economic challenges in China. Morgan Stanley analysts, including Tim Hsiao, noted, "While some of these discounts have been in place since April, the official announcement sends a strong signal of how tough the end market is." The move has sparked concerns about intensifying competition in the sector, leading to a broader sell-off among Chinese automakers. Peers such as Leapmotor, Geely Automobile, XPeng, and Li Auto also saw their shares drop between 2.8% to 8.9%. This price war comes as the Chinese auto market grapples with high inventory levels, with stock at dealerships reaching 3.5 million cars or 57 inventory days in April, the highest since December 2023.