OREANDA-NEWS  Shares of Chinese electric car manufacturer BYD fell by 30 percent. Bloomberg reports on the collapse in the value of securities of Tesla's main competitor.

The drop in prices is attributed to investors' loss of faith in the company's strategy aimed at maximizing benefits through large discounts, while the Chinese authorities are fighting the so-called involution, which damages the industry.

"Although I believe that investors remain positive in the long term, BYD's aggressive strategy of 'capturing market share through price pressure' raises serious concerns. In the short term, this should still have a negative impact on both revenue and profit," explained Kevin Net, head of Asian equities at Financiere de Lechiquier.

In June, the company's profit had already fallen by 30 percent — for the first time in more than three years. Meanwhile, Beijing is increasingly trying to curb excessive competition, which creates deflationary pressures and harms the international reputation of Chinese manufacturing.

In March, the auto giant reported that it intended to sell 5.5 million vehicles by the end of 2025, but later the figures were adjusted immediately by 16 percent, to 4.6 million vehicles. The company faced pressure from competitors — Geely Auto and Leapmotor.

As previously noted in the European Association of Automobile Manufacturers (ACEA), it was BYD's competition that prevented Tesla from maintaining its leading position in the European electric car market. If in June 2024, Tesla's share in the EU market was 3.4 percent, then in early summer of this year it dropped to 2.8 percent.