BYD has become a relentless discounter in the price war that Tesla started in the world's largest auto market last year. That aggressive stance has helped it unseat its U.S. rival as the world's biggest seller of electric vehicles, even though most of BYD's cars are sold in China.

BYD Co. has asked suppliers to accept price cuts next year in a signal the Chinese electric vehicle maker is preparing for the brutal price war in the world’s biggest auto market to intensify.

An executive from BYD said on Wednesday the Chinese automaker sets price reduction targets for suppliers when making large-scale purchases but these are negotiable and not mandatory. The comments from Brand and Public Relations Department general manager Li Yunfei on his Weibo account followed reports the Chinese automaker had told a supplier to cut prices by 10%.

Workers work on the assembly line at a factory of vehicle manufacturer BYD Auto in Xi'an, northwest China's Shaanxi Province. File photo: Xinhua. Annual price negotiations with su

We'll start with BYD and these potential price cuts. What level are we talking about here and what does this mean for both the Chinese EV market and the global? Who would even be riding with its advantages in supply chain and battery technology?

China's 4S dealership model, once a cash cow in the early 2000s, is unraveling under mounting pressure. The sector, which peaked around 2017, has been hit hard by fierce price wars and a market pivot toward domestic new energy vehicles (NEVs).