Shares of Chinese electric vehicle (EV) giant BYD have registered modest gains following renewed analyst focus on the significant value of its battery manufacturing arm. This positive sentiment is fueled by an optimistic research report from Bernstein, speculation regarding a potential supply deal with Ford, and signals of a potential de-escalation in EU-China trade tensions. The market is increasingly scrutinizing the standalone potential of BYD’s core battery business.
Battery Unit Valuation and Market Position
In a recent analysis, Bernstein reaffirmed its Outperform rating on BYD, pinpointing the battery division as a central pillar for the company’s worth. The research highlights BYD’s position as the world’s second-largest provider of batteries for electric vehicles by installed capacity. Notably, its battery capacity shipments exceed those of the third-largest competitor by approximately 70%.
Key insights from the Bernstein study include:
* A standalone valuation for the battery segment of around $110 billion.
* A 47% year-on-year increase in total battery shipments last year.
* More than a doubling of deliveries to stationary energy storage systems in 2025.
* A near-tripling of external battery supplies to automakers, including Xiaomi, Xpeng, and Toyota.
* Xiaomi and Xpeng each accounting for roughly 25% of BYD’s external EV battery shipments.
Bernstein’s analysis supports a price target of 130 Hong Kong dollars, implying an upside potential of roughly 30% from current levels.
Strategic Talks and Competitive Stature
Adding momentum to the narrative, a report from the Wall Street Journal indicated that Ford is in discussions to source batteries from BYD for certain hybrid models. While neither company provided specific commentary, the report itself underscores BYD’s growing clout within the global battery supply chain.
The scale of the two companies offers a striking comparison: Ford currently holds a market capitalization of approximately $55 billion, less than half of BYD’s roughly $115 billion valuation.
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European Trade Relations and Market Gains
Potential positive developments are also emerging from the ongoing EU investigation into Chinese EV imports. The European Commission is reportedly considering replacing its current high tariff structure with a minimum price system. This prospect provided an early-week boost, lifting BYD’s Hong Kong-listed shares by as much as 4.8% at one point.
Currently, additional tariffs on China-made electric cars into the EU stand at up to 35.3%. A minimum price model could offer Chinese manufacturers greater predictability and help stabilize margins for their European operations.
European Market Performance
BYD’s strategic progress in key European markets was underscored in 2025, where it surpassed Tesla in both Germany and the United Kingdom:
* Germany: BYD’s sales quadrupled to 23,306 vehicles, while Tesla’s registrations fell by nearly 50% to 19,390 units.
* United Kingdom: BYD achieved 51,422 new registrations, compared to Tesla’s 45,513.
This growth demonstrates BYD’s increasing weight in precisely those markets that hold strategic importance for Western automakers.
Sustained Growth Trajectory
Looking ahead, Bernstein forecasts a 10% increase in BYD’s domestic vehicle sales in China this year, reaching 5.4 million units. Overseas deliveries are projected to grow by 4.4% to 1.5 million vehicles. The China Association of Automobile Manufacturers (CAAM) anticipates overall New Energy Vehicle sales in China to expand by 15.2% in 2026.
The company plans to launch at least ten new models this year. Market experts see further catalysts on the horizon, including upcoming advancements in battery technology and several product announcements expected in the coming weeks.
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