BYD's Chengdu Showcase Puts Product Firepower Against a Margin Squeeze

BYD stock sits 24% below its peak as domestic price war hits profits, but record exports and new EVs like the Da Han signal growth ahead.

The stock trades at roughly €10, and the gap between where it has been and where it could go tells the story of a company caught between two very different realities. At €10.08, BYD sits 26 percent above its late-June low of €8.03, yet still 24 percent below the August 2025 peak of €13.23. That 24-percent chasm is where the drama lives: a brutal price war on home turf versus an export machine that keeps setting records.

The Chengdu Auto Show offered the clearest glimpse yet of how BYD intends to fight on both fronts. The company rolled out a wave of new metal, from a flagship sedan with a four-figure range figure to the first-ever limousine from its performance sub-brand. The timing was no accident — the board meets on 28 August to sign off on first-half results, and the product blitz reads as a deliberate signal to investors that the pipeline remains full despite a hostile market environment.

A flagship that stretches the range envelope

Leading the charge is the Da Han, a new top-of-the-line Dynasty-series sedan positioned above the existing Han and slotting alongside the Da Tang SUV. The fully electric version delivers up to 1,008 kilometres on China's CLTC testing standard — a figure that puts it in rarefied territory for a production EV. Three variants launch initially: a rear-wheel-drive LiDAR-equipped version priced at around $36,850, and a more potent all-wheel-drive configuration with 880 kilometres of range at roughly 300,000 yuan. Every trim comes standard with air suspension, rear-axle steering and the LiDAR-based God's Eye B driver-assistance suite.

Fang Cheng Bao, BYD's performance arm, is stepping out of its comfort zone. The brand built its name on off-roaders, but the new Formula S and Formula S GT mark its first limousine push. Both models made their global debut in Chengdu on 21 August, with pre-orders opening a day earlier. Pricing spans 230,000 to 280,000 yuan, and buyers choose between a single-motor setup producing up to 300 kilowatts or a dual-motor configuration that tops out at 240 kilometres per hour. First deliveries are slated for early September.

The sub-brand arrives with genuine momentum. Fang Cheng Bao shipped 41,213 vehicles in July, up 190.6 percent year on year, and cumulative sales for the first seven months have cleared 200,000 units. The brand says it passed the half-million mark for lifetime deliveries in early August, barely three years after launch.

The home market is still bleeding

The product offensive masks a grimmer picture in China proper. First-quarter 2026 net profit collapsed 55.4 percent to 4.08 billion yuan, with revenue down 11.8 percent to 150.23 billion yuan. Chairman Wang Chuanfu described the environment in March as a "knockout phase" — a period in which rivals like Geely, Xiaomi and Leapmotor are forcing the entire industry to sacrifice margin for market share. Domestic deliveries fell 39.6 percent in the first half, a decline that still dwarfs the absolute gains overseas.

The export engine, however, keeps gaining speed. Worldwide sales of electric and hybrid vehicles from January through July reached 2,227,722 units, down 10.54 percent year on year — but that is a marked improvement over the 15.72 percent decline recorded at the half-year mark. Overseas passenger-car and pickup sales hit 969,208 units, representing 43.5 percent of total volume.

July provided the strongest evidence yet that the trajectory is shifting. Wholesale deliveries reached 419,211 vehicles, up 21.76 percent year on year and marking a third consecutive month of growth. The acceleration from June's 5.46 percent gain was pronounced. Overseas sales hit a record 179,841 units — more than double the year-earlier figure.

The arithmetic of a stretched target

The company has twice raised its export goal for 2026, first to 1.3 million vehicles in January and then to 1.5 million in March, citing robust demand across multiple regions. Sustaining that pace requires July-like growth every month through year-end. The broader picture is no less demanding: after 1.81 million vehicles in the first half, BYD needs roughly 530,000 monthly deliveries for the remainder of the year just to hit the lower end of its five-million-unit target.

The bull case rests on pricing power abroad. A Sealion or Atto sold in Bangkok, São Paulo or Munich generates more revenue per vehicle than the same model in Chengdu or Hangzhou — often with healthier margins attached. Local production is meant to amplify that effect. A Thai plant already serves right-hand-drive markets across Southeast Asia and Oceania; a Brazilian factory came online in 2025 to cover Latin America; and a Hungarian facility slated for the fourth quarter of 2026 is designed to sidestep EU tariffs.

The bear case is equally straightforward. Exports, however fast they grow, remain too small to offset the erosion at home while China still accounts for the majority of volume. Trade barriers compound the problem: the EU levies a 17 percent countervailing duty on top of the standard 10 percent tariff, for a combined charge of roughly 27 percent, while the US market is effectively sealed shut by 100 percent duties on Chinese EVs. Full localisation that would neutralise these hurdles remains years away in key markets, leaving overseas profitability potentially more fragile than the headline sales numbers suggest.

Where the stock goes from here

The key metric to watch is the overseas share of total sales, currently hovering between 43 and 44 percent. Continued gains would lend credibility to the bull narrative and could set up a test of the 200-day moving average at €10.46, roughly 4 percent above the current price. A stall in that ratio — or a fresh acceleration in China's decline — would open the door to a pullback toward the 50-day average at €9.55, a level the stock currently sits about 5.2 percent above.

The monthly sales figures for August and September will serve as the next concrete checkpoints. They will show whether BYD can sustain the pace needed to hit that twice-raised 1.5-million export target — confirmation that the second half is genuinely delivering, not just promising. The 28 August board meeting and the half-year numbers it approves will provide the first hard evidence.