BYD Holds China's Top Spot as JPMorgan Slashes Target and Export Tax Break Narrows

BYD leads China's passenger-car retail market with a 15.3% share, but September sales dropped 28.9% year on year as JPMorgan downgraded the stock.

BYD's grip on China's passenger-car retail market remains intact, even as the broader picture around the Shenzhen-based automaker grows more complicated. Data released Tuesday by the China Passenger Car Association (CPCA) shows the company sold 246,816 vehicles in the domestic end-customer market last month, giving it a 15.3% share and first place among manufacturers.

That headline position, however, sits alongside a sharp contraction in demand. The same September figure represents a 28.9% decline from a year earlier, while BYD's own reporting puts pure domestic sales at 282,861 units, down 12.97% year on year. Total sales of new-energy vehicles across all channels reached 463,561 units in September, a 16.98% increase over the prior-year month, with battery-electric passenger cars accounting for 273,143 deliveries. Production for the month totaled 463,864 electrified vehicles.

The divergence between the group's overall growth and its home-market cooling has not gone unnoticed by analysts. On September 30, JPMorgan downgraded the stock from "Overweight" to "Neutral" and cut its Hong Kong price target from HK$124 to HK$88, citing expected weakness in China's auto sector, structural obstacles, softer domestic demand, rising costs, political uncertainty and looming trade barriers.

Nine-Month Tally Turns Negative

For the year to date, the growth story shows visible cracks. Across January to September 2026, sales of electrified vehicles totaled 3,131,576 units, a slight decline of 3.94% compared with the same period a year earlier.

Investors have responded with caution. The stock traded at EUR 8.37 on Tuesday, down 1.5%, extending its year-to-date loss to 22%. A separate reading placed the shares at EUR 8.36, off 1.6% on the day — both pointing to the same subdued mood at the trading venues.

Paris Showcase Meets Regulatory Headwinds

Against that backdrop, BYD used the Paris Motor Show to press its international ambitions, putting its lineup of electrified vehicles and new technologies on display. The centerpiece was the second generation of its Blade Battery, and the company also teased the unveiling of a further model. The push abroad comes as the home market and the regulatory environment present tangible challenges.

On the policy front, China's Ministry of Finance and the State Tax Administration have announced that the value-added tax rebate on exports of new-energy vehicles will drop from 13% to 9% effective April 1, 2027. Deutsche Bank analysts estimate the change could reduce BYD's net profit by roughly 5,000 yuan per exported vehicle starting in the second quarter of 2027. Media reports suggest the move could weigh on the margins of Chinese exporters more broadly.

Trade arrangements add another layer of constraint. A one-year quota agreed between the European Union and China caps China-produced hybrid vehicles at 350,000 units, limiting room in the European market. Reuters reported that in the first eight months of the year, BYD exported more plug-in hybrids than pure electric vehicles to Europe.

With those pressures mounting, defending its strong market share at home remains the company's most important pillar — even as the September retail figures show that base eroding.