ECONOMYNEXT – China’s BYD, the world’s top electric car maker, has slashed its prices by up to 30 percent in a new promotion, driving down EV stock prices as investors expect a reduction in profits.
BYD is operating on the key principle of what is known as ‘capitalism’ or free enterprise where companies compete with other businesses and ‘kneel’ before consumers to get their patronage, by giving a cheaper and better product.
It is not clear yet whether the government will intervene to support businesses against consumers and the market.
BYD’s Seagull is now priced at 2.3 million rupees, Seal 05 at 2.4 million rupees, Sealion 05 at 2.0 million rupees and Dolphin at 3.2 million rupees, in China, CNEVPost.com reported
The competition is likely to bring down profits of both BYD and other companies.
Shares of BYD and other Chinese producers also dropped.
The cost of commodity prices ranging from steel to Lithium have been falling after the US Federal Reserve started to stop printing money in 2022 as has the prices of foods.
Macro-economists, including the International Monetary Fund, blamed Putin’s war on rising commodity prices. The stories were widely believed by the public.
Lithium prices are now at 5 year lows.
China’s inflation has also been low after a credit bubble deflated, which was seen in the collapse of some property companies.
Sri Lanka has kept vehicle taxes high to limit imports and also raise revenue for the government.
Analysts have pointed out that reserve losses come from the central bank mis-targeting interest rates with open market operations which trigger unsustainable credit and not imports by the people.
To maintain one flawed operating framework of the central bank after the other, people have to give up their economic freedoms and reduce their living standards, critics have said.
Sri Lanka has a 5-7 percent inflation target to give profits to producers at the expense of the public and discourage productivity improvements.
High inflation targets will not only create social and political unrest but also make the country export uncompetitive, critics say.
Amid better monetary policy by the Federal Reserve and mainly stable exchange rate, both China and Sri Lanka have seen stable prices for several years, promoting innovations.
In 2025 Sri Lanka also slapped an import duty on cars, to transfer some of the tax revenues to domestic assemblers and boost their profits.
Sri Lanka needs taxes to support a large public sector. (Colombo/May27/2025)
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