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BYD, the Chinese manufacturer that has overtaken Tesla as the world’s largest seller of electric cars, is planning to ramp up production of more luxury models this year, boosting its credentials beyond budget-friendly cars.

The Shenzhen-based company is also mulling repurchasing more of its own shares, as it seeks to revive a stock price slump resulting in a 15-month low earlier this month. BYD’s stock market performance has taken a hit as broader fears of a renewed industry price war spook investors.

Shares in China more broadly have tumbled on wider concerns over the country’s economic performance. The Chinese car maker’s Hong Kong-listed stock closed down almost 2% on Monday, bringing losses this year to around 13%.

Pressure on rivals

BYD has upped the price pressure on rivals by unveiling a revamped version of its flagship Qin Plus plug-in hybrid sedan that starts at 79,800 yuan (€10,300) — 10,000 yuan cheaper than last year. BYD has said in the past it is determined to produce battery-powered electric cars that are cheaper than fossil fuel-powered cars.

After the Qin Plus move, rival SAIC-GM-Wuling, a joint venture between General Motors, SAIC,  and Wuling Motors, said it would also cut the price of its Xingguang sedan by 6,000 yuan.

The ongoing price war has already shown up in BYD’s results. It guided toward a preliminary 2023 net income of between 29bn yuan and 31bn yuan, short of analysts’ estimates of 31.5bn yuan.

Record deliveries in the fourth quarter, when BYD overtook Tesla as the world’s top seller of electric cars, did not translate into another bumper profit. Fourth-quarter net income will be between 7.2bn yuan and 9.2bn yuan, according to calculations, down from the previous quarter’s 10.9bn yuan. 

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