BYD Co is under mounting pressure to rebuild investor confidence after a US$45 billion (RM189.22 billion) market value wipeout, as doubts grow over its ability to withstand China’s bruising price war.
The Chinese electric-vehicle giant’s Hong Kong-listed shares have slumped more than 30% from their record high just four months ago, lagging peers. Analyst sell ratings on BYD are now at their highest since 2022, Bloomberg data show.
Investors are increasingly uneasy with the company’s deep-discount strategy, even as Beijing moves to curb the “involution” it says is destabilising the sector. Meanwhile, competitors such as Geely Automobile Holdings Ltd and Zhejiang Leapmotor Technology Co are chipping away at market share.
“While long-term sentiment remains positive, investors are worried about BYD’s aggressive ‘market share by pricing pressure’ approach, especially in the current regulatory climate,” said Kevin Net, head of Asian equities at Financiere de L’Echiquier. “In the near term, margins and topline will remain under strain.”
BYD’s June-quarter profit plunged 30% — its first drop in more than three years — hit by relentless discounting. Once the main driver of successive price cuts, the company now faces the reality of an ageing product lineup and stricter oversight from regulators keen to protect China’s global manufacturing image.
The EV maker has trimmed its 2025 delivery target to 4.6 million units from 5.5 million. To meet even this reduced goal, BYD must sell 1.7 million vehicles in the last four months of the year — a tough task without new models until early 2026.
Analysts expect the upcoming launches to be pivotal, with fresh designs, battery upgrades, extended hybrid ranges, and wider rollout of its God’s Eye autonomous driving system. “No carmaker can keep its lineup competitive forever — not even BYD,” said Xiao Feng, co-head of China industrial research at CLSA. “Customers are shifting to newer offerings from rivals like Geely and Leapmotor.”
Despite domestic headwinds, BYD is accelerating overseas growth. Goldman Sachs forecasts exports could hit 900,000 to 1 million units in 2025, outpacing management’s 800,000 target.
Valuations also provide some comfort: BYD trades at 17 times forward earnings, below its three-year average of 20 times. Options trading has surged, with nearly 600,000 contracts outstanding — triple June levels.
Analysts say how BYD positions itself in the coming year will be crucial. “If the company pivots from being seen as merely a cost leader to a true technology leader, it could spark a valuation re-rating, even if earnings face short-term pressure,” said Gary Tan, fund manager at Allspring Global Investments.
