(Yicai) Feb. 19 -- BYD announced two cut-price cars starting at CNY79,800 (USD11,000), further lowering the price of entry-level new energy vehicles in the Chinese market.

The plug-in hybrid Qin (Honor Edition) is priced at CNY79,800 to CNY125,800 (USD11,000 to CNY17,500), while the pure electric version costs CNY109,800 to CNY139,800, and the Destroyer 05 is priced at CNY79,800 to CNY128,800, the automaker revealed today.

That undercuts competing affordable fuel vehicles in the Chinese market, which cost about CNY94,000 each.

The cost of electric vehicle separators, electrolytes, battery raw materials and chips have dropped significantly compared with a year ago, Paul Gong, head of auto industry analysis at UBS, said at the start of the year.

The cost of producing a pure electric model has been reduced by about CNY20,000 (USD2,800), Gong said, adding that Chinese carmakers have been able to cut costs thanks to higher efficiency and ongoing scale effect.

Industry analysts said that BYD’s technology, vertical integration capabilities and advantages in the wider industry chain give it more pricing power than its rivals.

A teardown report on the BYD Seal by UBS found that about 75 percent of its parts are produced by the Shenzhen-based carmaker itself, and its production costs are 15 percent lower than the Model 3 produced at Tesla’s Shanghai Gigafactory and 35 percent lower than similar models produced by Volkswagen in Europe.

BYD overtook Tesla as the world's top seller of electric vehicles last year, and in January it sold 201,500 new energy vehicles, a 33 percent increase, with 36,200 sold in overseas markets.

Editor: Tom Litting