BYD has called for a massive wipeout of competition in China’s car market, demanding that nearly 100 manufacturers be removed from the field after Beijing officially banned discount tactics that fueled the industry’s price wars.Stella Li, executive vice-president of BYD, said the current number of carmakers was unsustainable and that the country’s market was too overcrowded.“Even 20 OEMs is too much,” she said during an interview with the Financial Times at the Munich Motor Show, stressing that price-based competition can no longer be the basis for survival.The Chinese government is targeting what it calls “neijuan”, translated as involution, which refers to extreme internal competition that ends up being self-defeating.Officials say discounting in the car industry is one of the reasons for the country’s worsening deflation, and the administration under President Xi Jinping is cracking down hard.Until now, China has had more than 130 manufacturers competing for slices of the world’s largest market for electric vehicles and plug-in hybrids. But that free-for-all is coming to an end.BYD predicts collapse as competition tightensLi warned that “some of the original equipment makers will be pushed out,” now that they can no longer rely on discounts to attract buyers. The ban hits at a time when EV prices in China have already fallen sharply, and smaller firms are being squeezed on all sides.BYD’s rivals, including Xpeng, also expect the total number of players to crash over the next few years. Xpeng has said the global car industry could shrink to just 10 companies by the end of the decade.Data from AlixPartners shows that of the 129 brands selling EVs and hybrids in China last year, only 15 are expected to stay financially afloat by 2030.BYD believes that with price wars out of the way, buyers will now focus more on technology, driving experience, and product quality. That shift plays to BYD’s strengths, but even the biggest player is not immune to government pressure.Despite its position in the market, BYD reported lower-than-expected revenue and net profit in the second quarter. Analysts say the company was affected by new rules targeting delayed payments to suppliers and Beijing’s overall effort to remove pricing loopholes.Investment bank Citi responded by slashing its forecasts for BYD’s sales. Instead of the 5.8 million cars it had expected BYD to sell in 2025, Citi now expects only 4.6 million. For 2026, the estimate dropped from 7.2 million to 5.4 million, and for 2027, from 8.4 million to 6 million. Last year, BYD sold 4.3 million vehicles.Li tried to ease concerns, saying, “I think our profit will still remain strong.” But she also admitted that more Chinese carmakers were now looking outside of the domestic market. “I think you will see more Chinese companies come overseas, but the overseas market is not that simple,” she said.That expansion push includes BYD’s own strategy in Europe, where the company is trying to secure more sales amid growing protectionist policies from the EU.BYD, Changan, Leapmotor expand beyond ChinaBYD is moving forward with plans to start vehicle production in Hungary before the end of the year. Li confirmed the factory project is on track, but added that scaling up would take more time.Alongside BYD, other Chinese brands are making moves abroad. Changan, a state-owned automaker, has just launched in the UK, while several others are using aggressive pricing and high-spec software features to draw in European customers.At the same time, Leapmotor, a Chinese EV startup, has entered a joint venture with Stellantis to explore manufacturing options inside Europe. Tianshu Xin, who leads the joint venture, said there is no immediate need to localize production despite the EU raising tariffs on EVs made in China.Leapmotor is considering building its B10 electric SUV at a Stellantis plant in Spain, but for now, the company is sticking to Chinese manufacturing. Xin said Leapmotor is managing well by using Stellantis’ supply chain and dealership network.When asked why the company isn’t shifting to European production yet, Xin said: “The [labour] cost is so high and the energy is so high.” Sign up to Bybit and start trading with $30,050 in welcome gifts