Chinese EV giant BYD has recently slowed production and expansion, cutting night shifts and reducing output by at least a third at several factories, according to industry analysis. The moves signal a potential slowdown in the company’s rapid growth, which had propelled it past Tesla as the world’s largest EV maker.

The shift comes amid rising inventory levels, despite BYD offering deep price cuts in China’s highly competitive auto market. At least four factories have been affected, and some plans for new production lines have been suspended. These changes aim to cut costs and respond to sales falling short of targets.

BYD’s sales growth has cooled, with production growth dropping to just 13% in April and 0.2% in May—its slowest pace since February 2024. Average output in April and May was 29% lower than in Q4 2024.

Despite offering models as low as ¥55,800 (~$7,800), BYD faces high dealer inventory, averaging 3.21 months, compared to the industry average of 1.38. One large BYD dealer in Shandong has already shut down, reflecting broader financial strain on dealerships.

In response to mounting pressure, Chinese auto dealers and industry groups are urging automakers to scale back production, pay dealer incentives faster, and adopt more sustainable pricing strategies. Amid intensifying competition and regulatory scrutiny, Chinese automakers—including BYD—are increasingly focusing on exports, which now account for 20% of BYD’s 1.76 million sales in the first five months of 2025.