BYD slows production, delays capacity expansion at China factories

TimesLIVE

3 days ago

Chinese electric vehicle champion BYD has slowed its production and expansion pace in recent months by reducing shifts at some factories in China and delaying plans to add new production lines, said two people with knowledge of the matter.
The decisions are a sign that BYD's robust sales growth over the past couple of years that drove it to overtake Tesla as the world's largest EV maker could slow, as it grapples with rising inventory even after offering deep price cuts in China's cut-throat car market.
BYD has cancelled night shifts and reduced output by at least a third of the capacity at some of its factories, said the sources who declined to be named because the matter is private.
These previously unreported measures were imposed on at least four factories and BYD had also suspended some plans to set up new production lines, one of the people said.
BYD, which sold 4.27-million cars last year, mostly in China, has at least seven car factories in the country and it has targeted a near-30% rise in sales to 5.5-million this year.
Reuters was not able to identify the exact scale of the production reduction and expansion suspension, nor to ascertain how long these measures may last. One of the sources said the moves were aimed at saving costs, while the other said they were imposed after sales failed to meet targets.
BYD did not immediately respond to a request for comment.
Data from the China Association of Automobile Manufacturers showed growth of BYD's output had slowed to 13% and 0.2% year on year in April and May, respectively, both of which were the slowest pace since February 2024 when factory activities were disrupted by a weeklong lunar New Year holiday.
BYD started ramping up monthly output from the second quarter of the year in 2023 and 2024, the data showed. But the trend has changed this year, with average output in April and May 29% lower than in the fourth quarter of 2024.