The world’s leading electric vehicle manufacturer, BYD, has encountered a significant hurdle at the start of 2026. Newly released January delivery figures reveal a sharp contraction, prompting the Chinese automaker to accelerate its counter-strategy focused on new model launches and international diversification.
January Figures Signal Market Shift
Data released Wednesday shows BYD delivered 210,051 all-electric vehicles in January. This represents a substantial 30.1% decrease compared to the same month last year, continuing a cooling trend that became evident in the domestic market towards the end of 2025. The company’s shares traded on the Hong Kong exchange declined following the report.
Regulatory Changes Dampen Domestic Demand
Analysts point to a major regulatory shift in China as the primary driver behind the slump. A new 5% purchase tax on electric vehicles took effect on January 1, 2026, eliminating the previous full exemption. This policy change coincided with the expiration of numerous regional subsidy and trade-in programs that had bolstered sales throughout 2025.
The combined impact of these factors is most acutely felt in the price-sensitive mass market segment—the very segment where BYD holds its dominant position. This dual pressure has created a challenging environment for domestic volume growth.
Strategic Pivot: Product Refresh and Global Focus
In response, BYD is not standing still. The company unveiled teaser images for a new mid-size electric crossover, the Song Ultra EV, on Wednesday. This vehicle is intended to strengthen its Dynasty series and compete more aggressively in the popular SUV category.
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Concurrently, the automaker is deepening its global reach. BYD Vice President Stella Li confirmed on Tuesday that the company is developing a model variant specifically designed for the Indian market. This move signals a clear intent to use international expansion to counterbalance saturation in its home market.
Key Data Points:
* Total January Sales: 210,051 units (-30.1% year-over-year)
* Export Volume: Approximately 100,482 units (nearly 50% of total sales)
* New Purchase Tax: 5%, effective January 1, 2026
* New Sub-Brand: “Linghui” (focus on fleet business)
A New Venture into Fleet Mobility
A further strategic development is the launch of the new Linghui sub-brand. Unlike BYD’s consumer-focused brands like Yangwang or Fang Cheng Bao, Linghui explicitly targets commercial mobility services, including ride-hailing fleets and taxi companies. This segmentation allows BYD to cater to the specific requirements of fleet operators without diluting the premium positioning of its consumer brands.
The company’s internationalization drive is already bearing fruit, with exports now accounting for close to half of its monthly sales volume. This growing overseas presence is increasingly serving as a stabilizing force. The critical question for BYD is how quickly the Song Ultra EV and the new Linghui fleet brand can translate into concrete sales to help stabilize overall delivery numbers.
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