Quick overview

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BYD is under pressure to regain investor trust following a $45 billion stock sell-off, amid growing concerns about its ability to withstand competition in the current price war in China. The company’s Hong Kong-listed shares have dropped over 30% from their peak just four months ago.

 

According to Bloomberg data, analysts ‘ ratings on BYD have reached their highest level since 2022. Investors are losing patience with BYD’s strategy of aggressive discounts, and the industry is feeling the impact as the government intensifies efforts to limit excessive competition. Meanwhile, competitors such as Geely Automobile Holdings Ltd. and Zhejiang Leapmotor Technology Co. are rapidly catching up.

BYD reported a profit decline of 30% in the second quarter, marking its first drop in over three years. As manufacturers vie for market share, BYD, China’s leading electric vehicle manufacturer, has played a significant role in driving multiple rounds of discounts. The Chinese government has become increasingly vocal about its intent to curb excessive competition, which it views as a contributor to deflationary pressure that could harm the global standing of Chinese manufacturing.

Originally targeting the delivery of 5 million vehicles this year, BYD has now lowered its expectation to 4 million.

The company will need to deliver around 1.7 million vehicles in the last four months of the year to meet this revised target, particularly given its aging product lineup and the new regulatory environment. Market analysts predict that BYD’s stock will receive a significant boost with the introduction of new models in the first quarter of 2026, as the company has delayed some launches until next year to enhance the competitiveness of its vehicles.