BYD vs Tesla: When cost leadership challenges premium technology positioning

Low prices are highly valued by consumers, yet they entail significant strategic risks for firms. Companies therefore often avoid lowering prices, as such decisions may trigger price wars with far-reaching consequences across the market.

This case study, based on data collected between 2011 and 2026, examines the strategies of two leading electric vehicle manufacturers: Tesla (USA) and BYD (China).
It analyses their pricing decisions and competitive behaviors within a rapidly evolving industry.

Designed for master's students in Marketing, Strategy, and International Business, as well as practitioners, the case aims to deepen understanding of the benefits, risks, and trade-offs associated with low-price strategies.
Key concepts include competitive pricing, price elasticity, market leadership and retaliation, as well as the dynamics and sustainability of price wars.

-      Understand price war triggers in oligopolistic industries (market saturation, technological convergence, excess capacity, high margins, scale economies, fragmented competition).
-      Explain when price wars are effective, based on price elasticity, scale economies, industry structure, and excess capacity.
-      Identify impacts on industry stakeholders (leaders, challengers, suppliers, regulators, consumers) using Tesla and BYD as examples.
-      Evaluate "leader loss" strategies (margin sacrifice, signaling, pre-emption) and their conditions for success or failure, based on Tesla's case.
-      Recommend responses to pricing shocks (e.g., BYD's 8% cut) considering margins, regulation, investor pressure, inventories, and supplier cycles.
-      Assess government intervention in price wars, distinguishing effective regulatory tools from structural imbalances (e.g., overcapacity).
-      Compare Tesla's and BYD's strategic evolution to derive lessons on positioning, vertical integration, and limits of price competition.

Price War - Tesla - BYD - Skimming strategy - Penetration strategy - Electric vehicules

L3
M1, M2, Masters spécialisés
Ecole d'ingénieurs
MBA

Année de la problématique : 2026

Livraison : Livraison par lien de téléchargement

Nombre de pages : 23

Temps d'utilisation : 3h00

Code du secteur d'activité : NS - Non significatif