The competitive pressures in China’s automotive market are intensifying for BYD, with the company’s stock feeling the strain. Over the past week, its shares listed in Europe have declined by approximately 7%, trading near €9.87. This downturn coincides with the release of January delivery figures, which revealed a fifth consecutive month of falling sales volumes.
A Detailed Look at January’s Performance
The latest data underscores the challenge. BYD sold 210,051 vehicles in January, representing a significant year-on-year decline of 30.1%. A breakdown shows particular softness in the battery-electric vehicle (BEV) segment, where sales dropped to 83,249 units—the lowest monthly figure since February 2024. Sales of plug-in hybrid electric vehicles (PHEVs) also contracted by 28.5%.
This domestic slowdown is attributed to several factors, including the introduction of a 5% purchase tax on electric vehicles in China effective from the start of the year. The dampening effect on local demand appears more pronounced than anticipated. Meanwhile, rivals are gaining ground. Geely reported January sales exceeding 270,000 vehicles, outpacing BYD for the month. Other competitors like Aito and Leapmotor also posted strong growth, with deliveries surging 80% to over 40,000 units and rising 27%, respectively.
Strategic Pivot to International Markets
In response to the softening home market, BYD is accelerating its global expansion. The company exported 100,482 vehicles in January alone. Its ambitious roadmap targets 1.3 million international sales by 2026, which would equate to a planned increase of 24%. Early signs in key markets are promising: January sales in the United Kingdom reportedly doubled, and registrations in Germany saw a notable uptick, albeit from a modest base.
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A potentially significant development has emerged from North America, where Canada has reportedly reduced tariffs on Chinese EVs to 6.1%, down from a previous rate of 100%. This shift could provide meaningful relief for BYD’s expansion plans.
The company’s intensified focus abroad comes amid broader sector uncertainty. Recent announcements, such as Stellantis’s €22 billion impairment charge citing overestimated EV demand, have added to investor caution about the industry’s near-term trajectory.
Investor Sentiment and the Road Ahead
Market participants are closely monitoring whether BYD’s export momentum and localization projects—including ventures in Brazil and Hungary—can offset the declining demand in China. Since May 2025, the company’s market capitalization has contracted by roughly $60 billion, reflecting scaled-back growth expectations in a climate of heightened taxation and fierce competition.
The key metric for the coming quarters will be the balance between domestic sales and export growth. Sustained robust performance internationally could partially cushion the downturn in China. However, if overseas momentum wanes, pressure on the company’s 2026 outlook is likely to intensify further.
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