BYD Company Limited’s stock has declined to its lowest point in nearly a year, pressured by a combination of weak domestic sales figures for January and investor uncertainty surrounding the expiration of government incentives. The sell-off was pronounced for the company’s Hong Kong-listed shares, with mainland-traded securities also experiencing notable downward pressure.
A central challenge for the electric vehicle (EV) maker is the increasingly divergent performance of its home and foreign markets. While consumer demand within China shows signs of cooling, international shipments are accelerating at a robust pace. The critical question for investors is whether this export strength can sufficiently offset the domestic slowdown.
Key January Delivery Figures:
* Total New Energy Vehicle (NEV) Sales: 210,051 units (-30.1% year-over-year)
* Passenger Vehicle Sales: 205,518 units
* Export Volume: 100,482 units (+51.47% year-over-year)
* Export Proportion: Approximately 48% of total deliveries
Domestic Cooling Contrasts with International Surge
The company’s January deliveries of New Energy Vehicles, which include both passenger and commercial units, fell by roughly one-third compared to the same period last year. This contraction was primarily driven by a marked deceleration in the Chinese market.
In stark contrast, BYD’s overseas business is expanding vigorously. Exports surged to over 100,000 units, representing a gain of more than 51% from January of the previous year. This performance means that nearly half of all vehicles delivered last month were destined for international customers.
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Analysts point to several factors weighing on the domestic business, including adjustments to national purchase tax benefits and the conclusion of various regional subsidy programs. Furthermore, competition in China’s EV sector continues to intensify, leading to sustained price pressures.
Navigating a Complex Global Regulatory Landscape
BYD’s international growth is unfolding against a backdrop of varied regulatory environments. In Japan, the automaker is adapting its strategy following revisions to government rules on clean energy subsidies. According to industry reports, BYD plans to introduce plug-in hybrid electric vehicles (PHEVs) to the Japanese market to broaden its customer appeal.
Concurrently, the company is advancing its push into new territories. On February 4, BYD officially entered the Egyptian market in partnership with the Mansour Group. Its launch lineup featured the BYD Dolphin (marketed as the “Dolphin Surf”), alongside the Song Plus EV and Song Plus DM-i models (both offered as variants of the “Sealion 6”). This move aligns with a strategic focus on deepening its presence in emerging markets across the Middle East and Africa.
Broader Market Presents Additional Challenges
The wider industry context also presents hurdles. In a January report, Morgan Stanley highlighted that order intake for major EV manufacturers had declined at the start of the year on a month-over-month basis, suggesting a “cold start” to 2026. The same analysis projected that Chinese passenger vehicle sales in the first quarter could contract by 5 to 7% compared to the prior year.
Investors appear to be pricing in these near-term risks with increased caution. The current share price correction extends a period of valuation adjustment for BYD, which has been retreating from the highs it reached in 2025.
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