BYD Shares: Navigating Crosscurrents in Global Markets

BYD CNE100000296

A mix of strategic developments and shifting trade winds is creating fresh dynamics for BYD's stock. While the electric vehicle giant continues its aggressive international push, investors are weighing new opportunities against persistent margin pressures at home.

Recent confirmed figures for 2025 highlight BYD's rapidly growing global footprint, moving the company beyond reliance on its domestic Chinese market. Key metrics reveal a significant expansion:
* Vehicle Exports: Projected to surge from 0.4 million units in 2024 to over one million in 2025.
* Global BEV Sales: The company aims to sell 2.25 million battery-electric vehicles worldwide in 2025.
* Share Performance: Reflecting this momentum, BYD's Hong Kong-listed shares recently advanced by 1.109% to HK$100.30.

This week, the opening of BYD's first Brand Center in Tanzania—a 2,000-square-meter facility—underscores its strategic focus on emerging African markets as part of this broader export offensive.

A Strategic Opening in Canada

A major policy shift is unlocking a key G7 market for Chinese automakers. Canada has implemented a new trade arrangement with China, dramatically reducing the import duty on Chinese electric vehicles from 100% to 6.1%.

This "Most-Favored-Nation" rate applies to an annual quota of 49,000 vehicles. For BYD, the implications are substantial:
* Regaining access to a major market that was previously virtually closed.
* Creating entry opportunities in the volume segment priced under CAD 35,000.
* Marking a clear divergence in North American trade policy, with Canada adopting a more open stance compared to the continued restrictive approach of the United States.

While BYD's prior sales in Canada have been minimal, the fundamental conditions for a serious market entry have now improved.

Battery Supply Talks with Ford

Alongside geopolitical developments, industry reports point to potential technical collaboration with American automaker Ford. The companies are said to be in negotiations concerning a battery supply agreement.

The discussions are focused on battery systems for Ford's future plug-in hybrid electric vehicle (PHEV) models. A finalized deal would achieve two key objectives for BYD:
* Solidifying its position as a Tier-1 supplier for a major US automotive manufacturer.
* Leveraging its vertical integration to generate additional revenue streams beyond pure vehicle sales.

Although specific contract details or volumes have not been disclosed, the talks highlight BYD's recognized technological relevance in the core battery sector.

Margin Compression and Analyst Caution

Despite strong volume growth, near-term profitability remains a concern. Fierce competition within China's domestic automotive market continues to squeeze margins.

Confirmed financial data illustrates this pressure:
* 2024 Gross Margin: 19.4%
* Q2 2025 Gross Margin: Declined to 16.27%

Market experts also point to a JPMorgan forecast suggesting a subdued start for the Chinese auto market in the first quarter of 2026. Consequently, investors are tasked with pricing in several concurrent factors:
* The positive catalyst of Canadian tariff reductions.
* Potential ancillary battery business from a Ford partnership.
* Robust export and BEV sales figures.
* Headwinds from margin compression and an anticipated softening in the home market.

Against this backdrop, BYD's equity continues to trade within a consolidation phase, as the market balances these new North American opportunities against ongoing challenges in its domestic arena.