A Multifaceted Surge for BYD: Global Deals and Analyst Confidence Drive Momentum

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BYD, the world's leading electric vehicle (EV) manufacturer, has received a cluster of positive developments this week, providing significant tailwinds for its shares. From pivotal North American trade policy shifts to bullish analyst commentary and new product launches, several factors are converging to bolster the company's outlook. The question for investors is whether these impulses can counterbalance recent growth deceleration in its domestic market.

On January 18, investment bank Bernstein reaffirmed its "Outperform" rating for BYD's Hong Kong-listed shares. The firm set a price target of 130 Hong Kong dollars (approximately 16.67 US dollars), suggesting an upside potential of roughly 30% from Friday's closing price.

Analysts at Bernstein argue that the current market valuation fails to adequately reflect the worth and growth prospects of BYD's battery division. Their report suggests this segment alone could be valued at around $110 billion—nearly equivalent to the conglomerate's entire market capitalization of approximately $115 billion.

Key Battery Business Developments Noted:
* BYD ranks as the world's second-largest battery manufacturer by EV installations.
* Battery shipments surged by 47% in 2025, with forecasts predicting an additional 35% growth in 2026.
* External battery shipments constituted over 10% of total group revenue last year.
* Xiaomi and XPeng each account for 25% of external EV battery supplies.
* Shipments for stationary energy storage batteries more than doubled in 2025.

The research team anticipates near-term catalysts from new battery-electric models, upcoming battery technology upgrades, and several product launches scheduled within the next month.

Canada Eases Path to North American Market Access

In a significant move for market access, Canadian Prime Minister Mark Carney announced on Friday a reduction of punitive tariffs on Chinese electric vehicles from 100% down to 6.1%. The new policy allows for the import of up to 49,000 Chinese EVs, providing BYD with a crucial avenue to advance its North America strategy.

The Canadian government stated that this import quota is based on volumes from the 2023–2024 period, prior to recent trade tensions, and represents less than 3% of the country's new car market. Over half of these imported vehicles are expected to be affordable models priced under $35,000 within a five-year framework.

This announcement follows comments from U.S. President Donald Trump in Detroit, where he explicitly invited Chinese automakers to establish production facilities in the United States. As the global EV leader, BYD is viewed as a primary potential beneficiary of this shifting policy landscape.

European Commission Clarifies No Hybrid Tariff Investigation

Adding to the positive sentiment, the European Commission provided clarifying remarks on Monday. EU trade spokesperson Olof Gill, speaking at a press conference in Brussels, denied reports that the bloc was considering punitive tariffs on Chinese hybrid vehicles similar to those for pure battery-electric cars.

"There is no ongoing investigation into exports of hybrid vehicles from China to the European Union," Gill stated.

This clarification comes against a backdrop of rapidly rising Chinese hybrid exports to the EU, which jumped 155% last year. In contrast, exports of battery-electric vehicles grew by only 12%. BYD's plug-in hybrids, including models like the Qin L DM-i, had been under scrutiny following media reports suggesting a hardline stance from French EU Commissioner Stéphane Séjourné.

The EU and China had previously reached an agreement on January 12 regarding minimum prices for Chinese BEV exports, allowing manufacturers to avoid additional tariffs if they adhere to set price floors.

New Flagship Models and Potential Ford Partnership Emerge

Also on Monday, BYD unveiled two new flagship additions to its Ocean Series: the Seal 08 sedan and the Sea Lion 08 SUV. Both vehicles belong to the new Ocean-8 lineup and signify the company's entry into the large flagship vehicle segment. Their design is inspired by the Ocean-S concept showcased at Auto China Shanghai 2025 and follows the new "Ocean Aesthetics" design language. Cumulative sales for the Ocean Series have reached 6 million units since its launch in November 2021, with several models—including the Song PLUS, Seagull, Dolphin, and Seal—each surpassing 1 million units sold.

Separately, a January 15 report from The Wall Street Journal indicated that Ford is in discussions with BYD regarding the supply of batteries for hybrid vehicles. Both companies declined to comment on the specifics of the negotiations. Ford stated only that it talks with "many companies about many things." A potential supply agreement would further cement BYD's role in the global battery value chain and strengthen its position as a supplier to major international automakers.

Market Context and Forward Outlook

Despite this week's encouraging news, BYD faces ongoing challenges. Operating in an increasingly competitive home market, the company reported its weakest annual sales growth in five years for 2025 at 7.73%. Domestic sales declined for four consecutive months through December.

In contrast, the international business has shown remarkable strength. Overseas sales hit a record 1,046,083 vehicles in 2025, representing a 150.7% increase year-over-year. For 2026, BYD is targeting up to 1.6 million vehicle sales outside of China.

Bernstein forecasts domestic sales growth of 10% to 5.4 million units this year, with overseas sales expected to rise 4.4% to 1.5 million units. Overall, BYD plans to launch at least ten new models in 2026.

The next key milestone is the upcoming annual report, expected on March 23. This release will provide critical data to assess the extent to which international expansion and battery division performance are offsetting softer domestic market trends.