BYD Plays the Lone Hand in Europe as Record Exports Offset Home Market Slump

BYD seeks sole control of idle European factories to bypass 17-35% EU tariffs. Domestic profit down 55% Q1; April exports +70% to 135k. Stock -22% YoY; bullish.

The world’s largest electric-vehicle maker is pushing deeper into Europe on its own terms. BYD is in active talks with Stellantis and other European carmakers to acquire idle factories — and it wants to run them without a joint venture partner. “It’s very hard to cooperate and have to ask for permission. We prefer to do everything ourselves,” executive vice president Stella Li said at the Financial Times “Future of the Car” conference in London.

The logic is straightforward. Producing inside the EU sidesteps the provisional tariffs of 17% to 35% that Brussels imposed on Chinese electric vehicles in October 2024. Existing plants such as Stellantis’s Cassino facility in Italy illustrate the opportunity: the site built just 2,916 cars in the first quarter of 2026, a 37% drop from a year earlier, and runs only five or six days a month. Stellantis, weighed down by a €22 billion writedown on its EV business, confirmed it holds routine talks with various industry players but declined to comment on specific negotiations. BYD is also eyeing struggling European auto brands, including Maserati, as it accelerates its continental push.

The urgency on the home front is stark. BYD’s net profit plunged 55% in the first quarter of 2026, the culmination of eight consecutive months of declining domestic sales. Even in 2025, annual profit fell 19% to 32.6 billion yuan despite a record 4.6 million vehicles sold. Higher margins abroad have become a lifeline. BYD has raised its export target for 2026 to 1.5 million units — roughly 50% more than last year — and the numbers are already running hot.

In April alone, BYD shipped 135,000 vehicles overseas, a 70% surge from a year earlier and a new monthly record. The first four months of 2026 pushed cumulative exports to about 456,000 units, with foreign markets now accounting for nearly 43% of monthly sales. Europe is the fastest-growing region: first-quarter deliveries jumped 170% to just over 50,000 vehicles, lifting BYD’s market share to 1.8%. In Germany, BYD registered 4,705 new cars in April — a monthly record and more than triple the year-ago figure. Across the Channel, BYD has become the best-selling EV brand in Britain by new registrations, ahead of Tesla and every major European maker.

The stock has not mirrored the operational momentum. BYD’s H-share (1211.HK) closed the week at HK$96.45, roughly flat year-to-date but down 22% over twelve months — and a long way from its 52-week high of HK$159.27. The shares lost more than 10% in the past month alone. Still, analysts remain broadly bullish. The average price target among 25 covering the stock is HK$124, unchanged despite downward revisions to 2026 revenue and profit forecasts. Citigroup, which lists BYD as a top pick, has a target of HK$142 and expects second-quarter core profit of as much as 11.3 billion yuan, provided overseas volumes hold up and Chinese prices stabilise.

The biggest wildcard is political. Whether Brussels and individual member states allow a Chinese company to take over European auto plants — or block the move on industrial-policy grounds — will determine how fast the talks progress. JPMorgan predicts Chinese manufacturers will capture a 20% share of Western Europe’s auto market by 2028, with BYD leading the charge. For now, BYD is betting it can fill Europe’s empty factories faster than anyone else can build new ones.