Slowing demand has BYD reducing shifts at China EV plants
Reuters reports Tuesday, citing people with knowledge of the matter, that BYD has reduced shifts at two auto assembly plants in China.
According to three of the sources and an internal memo sent earlier this month, BYD, which outsells Tesla (NYSE: TSLA) in China, asked some of the workers at its Xian plant, its biggest manufacturing hub, to work only four days a week in a factory running two eight-hour shifts per day
BYD also reduced shifts at its Shenzhen plant, which makes its Han sedans, from three shifts per day to two per day, four people with knowledge of the development said.
According to Reuters, BYD did not give a reason for the reduced shifts in its planning memo. One of the people said BYD was throttling back on production in the face of weaker industry-wide demand in China since the start of the year.
Local Chinese authorities have also been rolling out buyer subsidies to drive demand and some of these programs have started to extend to automakers to encourage manufacturing.
On Tuesday, the Xian government announced that to encourage local EV production, it would give a 2,000 yuan reward per vehicle for every car produced over 2022 levels to a maximum of 10 million yuan ($1.45 million) per automaker. It also announced subsidies for EV purchases.
BYD produced 5,749 cars in January and February on average per day, 22% fewer than its average daily output in October and November. Also, retail sales, based on insurance registration data, showed slower growth of 66%.
To drive demand, BYD began offering discounts for its best-selling Yuan Plus and Seal EVs in March. The company also launched refreshed versions of its Han sedan and Tang crossover last week.
By Michael Elkins | [email protected]