BYD's China EV dominance slips as stock drop $45 billion in value

BYD just got slammed with a $45 billion market wipeout, and it’s not looking like the bleeding’s over. The company’s stock on the Hong Kong exchange has tanked more than 30% in just four months, hitting levels not seen since before it surged to its all-time high.

The collapse has left investors pissed and analysts waving red flags. Bloomberg says sell ratings on the stock are now the worst they’ve been since 2022.

The collapse is tied to one thing: BYD’s strategy of deep discounting. It’s been dragging down prices in China’s EV market to stay ahead, even as the Chinese government steps in to stop the price war tearing the industry apart.

While BYD keeps slicing margins, Geely and Leapmotor are eating its lunch, grabbing market share without destroying their own profits in the process. Investors dump stock as BYD profit plunges 30% Investor confidence is now on life support.

Kevin Net, head of Asian equities at Financiere de l’Echiquier, said it plain: “While I believe investors retain a positive long-term view, there is a real concern around BYD’s aggressive ‘market share gain by pricing pressure’ strategy in the anti-involution context. In the short term, this should still weigh on both topline and margins.

” The price war already hit hard. BYD’s June-quarter profit fell 30%, its first year-over-year drop in more than three years.

And this is the company that’s been leading the charge on discounts across the board for years. Now the government’s had enough.

Beijing has started speaking out, calling the hyper-competitive tactics a deflation risk and warning that the mess is hurting how the world views Chinese manufacturing as a whole. On top of that, BYD slashed its 2025 delivery target from 5.

5 million vehicles to 4. 6 million.

It needs to move 1. 7 million units in the last four months of the year to even hit that new target, and that’s not going to be easy with a lineup of cars that’s looking stale and a regulatory environment that’s tightening fast.

Xiao Feng, co-head of China industrial research at CLSA Hong Kong, said : “No OEM could keep their product cycle strong forever, even BYD cannot. ” He said the company’s models haven’t evolved much since its 2018–2024 dominance, and now buyers are chasing newer players like Geely and Leapmotor, who are putting out fresher, more exciting cars.

Global sales rise as company delays domestic launches BYD is now looking overseas for a win. After expanding production in new markets and pushing more models abroad, it might ship 900,000 to 1 million vehicles in 2025, according to analysts at Goldman Sachs.

That beats its previous international goal of 800,000, and it’s the one part of the business that seems to have real momentum left. Back home though, BYD is delaying product launches until early 2026.

The plan is to make the next round of cars stronger and more competitive against the flood of new Chinese EVs. Analysts say upcoming launches will feature updated designs, battery improvements, and longer ranges on plug-in hybrids.

One key feature expected is the God’s Eye autonomous driving system, which could start showing up in cheaper models for the first time. Valuation-wise, the stock is now trading at 17 times forward earnings, lower than its three-year average of 20.

Some traders might see that as a discount. But with BYD’s earnings under pressure and its brand image slipping, that lower price isn’t exactly pulling buyers in.

Meanwhile, options trading volume has exploded, with nearly 600,000 open contracts, triple what it was back in June. The company’s next big shot at a rebound lies in those domestic launches.

The new models, and how BYD decides to price them, could determine whether investors give it another chance or keep pulling their money out. Gary Tan, fund manager at Allspring Global Investments, summed it up: “Strategic developments that reposition BYD as a technology leader rather than simply a highly efficient EV manufacturer could reshape investor perception and drive share price upside through a valuation re-rating, despite near-term downward pressure on earnings.

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