BYD’s European Reset: Factory Acquisitions Replace Greenfield as Stock Sinks and Pentagon Fight Looms

BYD shares drop 13% YTD after US blacklist and halted Turkey plant; firm eyes Spanish factory to bypass EU tariffs, while next-gen battery promises 2027 growth.

BYD’s shares hit a fresh 52?week low of €9.25 on Thursday before clawing back to €9.49 by the weekend, leaving the stock down roughly 13% since the start of the year. The sell?off reflects a double hit: a Pentagon blacklist and a strategic overhaul of its European manufacturing plans that has seen a planned Turkish greenfield project shelved in favour of buying existing factories.

The US Defense Ministry added BYD to its list of Chinese military companies on June 8, a move the company has “firmly rejected” and is considering legal action against. From June 30, the Pentagon will be prohibited from signing new direct contracts with the automaker, though broader trade restrictions remain absent. The direct financial impact is expected to be limited, but the geopolitical stigma has rattled institutional investors.

Across the Atlantic, the company is scrambling to adjust its European footprint. A planned €1bn plant in Manisa, Turkey, has been halted to focus resources on its first EU facility in Szeged, Hungary. That factory is now slated to begin production in the fourth quarter of 2026, later than previously hoped. To bypass EU tariffs on Chinese EVs more quickly, BYD vice?president Stella Li is actively hunting for an existing auto plant in southern Europe, with Spain emerging as a front?runner.

The urgency is underlined by sales momentum. In the first five months of the year, BYD sold more than 100,000 vehicles in Europe alone, while global overseas shipments hit 160,000 units in May — an 80% surge year?on?year. Yet the fierce domestic price war in China continues to squeeze margins, keeping the stock under pressure. Thursday’s drop coincided with the ex?dividend date, adding to the downward move.

Chairman Wang Chuanfu remains fixated on overtaking Toyota as the world’s largest automaker within five years. The key catalyst is the next?generation Blade battery, which management expects to resolve current production bottlenecks. Once new battery capacity comes fully online in 2027, the company anticipates a sharp growth acceleration. In the meantime, capital is flowing into infrastructure, including a billion?euro investment in a European fast?charging network.

Technically, the stock is approaching oversold territory with a relative strength index of 33.7. If the support level at the recent low of €9.25 holds, a short?term bounce could materialise. For now, the narrative pivots on whether BYD can execute its factory?acquisition strategy fast enough to offset trade barriers and restore investor confidence.