BYD vs Huawei: Trash talking by China’s EV giants highlights pressures at heart of world’s biggest car market

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Hong Kong CNN —

As profit margins get squeezed, temperatures are rising in the world’s biggest car market.

A tense exchange between two major Chinese electric vehicle(EV) manufacturers in recent days highlights the pressures they face as a price war in the industry intensifies.

It all started onSaturday,when Yu Chengdong, the chairman of Huawei’s smart car unit, implied that rival EV maker BYD is racing ahead because of low prices rather than thequality of itscars.

“Currently, BYD is … number one in the rat race, because it has extremely low costs,” he said at a public forum in Shenzhen.

BYD, a carmaker Elon Musk once laughed at, overtook his Tesla (TSLA) at the end of last year as the biggest seller of electric vehicles on the planet. (Tesla regained its position in the first quarter of this year, but they’re neck and neck.)

SAIC-GM-Wuling Automobile Co. electric vehicles are plugged in at charging stations at a roadside parking lot in Liuzhou, China, on Monday, May 17, 2021.

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“We are not good at competing with ultra-low prices. Rather, we are good at competing with value, intelligence, luxury, comfort, safety, high quality, excellent and comfortable user experience,” Yu added.

While top executives from the EV industry often post on social media about a range of topics, including technology and advertising, they rarely name rival companies, especially when criticizing them.

In recent months, a price war has escalated in China’s hyper-competitive EV industry,