BYD's Washington Breathing Room Can't Offset a Slowing Home Engine

BYD closed at EUR 8.39, down 2.4%, as the Senate postponed a connected-vehicle ban bill and JPMorgan cut its rating to Neutral with an HKD 88 target.

A legislative pause in Washington has handed BYD a temporary reprieve from the threat of a permanent US ban on connected vehicles, but the Chinese automaker's shares still finished the week on the back foot in Europe. The stock closed Friday at EUR 8.39, down 2.4% on the day, as a broad selloff in Chinese electric-vehicle names dragged the sector lower in Hong Kong.

The US Senate on Wednesday postponed deliberations on a bill that would permanently prohibit the import, production and sale of connected vehicles—along with related hardware and software tied to China. For BYD and its peers, the delay amounts to a stay of execution on looming American market-access restrictions, though it does nothing to resolve the underlying trade-policy uncertainty.

September Momentum Cools Into Peak Season

BYD published its September delivery figures on Thursday, and the headline numbers cut both ways. Sales of new-energy vehicles climbed 17% year on year to 463,561 units, a figure that also represents a 16.98% increase over the same month a year earlier. The export segment was a standout: passenger-car and pickup shipments abroad reached 179,877 units, a robust contribution that Reuters reported is helping to offset persistently weak demand at home, where manufacturers are mired in a brutal price war and consumers remain cautious.

Yet the growth rate itself tells a less flattering story. September's 17% expansion marks a deceleration from 18% in August and 22% in July, according to Dow Jones. The timing amplifies the concern: September traditionally kicks off the strongest sales stretch of the year in China's auto market, so a softer-than-expected seasonal lift has stoked worries about the broader appetite for vehicles among Chinese consumers.

The cumulative picture is starker still. Across the first nine months of the year, BYD moved 3,131,576 units—a 3.94% decline compared with the prior-year period, based on unaudited company figures.

JPMorgan Steps Back

Institutional sentiment has cooled in tandem. JPMorgan downgraded BYD on Tuesday from "Overweight" to "Neutral" and slashed its price target to HKD 88 from HKD 124. The US bank pointed to the soft domestic demand alongside a cluster of structural headwinds: rising input costs, persistent trade barriers in international markets and broader political uncertainty that narrows the company's room to maneuver.

Hong Kong traders reacted tepidly to the week's disclosures, with the local listing giving ground after trading resumed, according to media reports.

A Widening Gap to the Highs

The cumulative effect on the share price has been pronounced. Following the latest pullback, BYD now sits 33% below its 52-week high—a gap that underscores how reluctant investors have become toward the stock. At the same time, the shares trade 4.5% above their 52-week low on European exchanges, leaving the equity pinned in a narrow band that reflects the tug-of-war at the heart of the BYD story.

That tension is unlikely to resolve quickly. Overseas expansion is opening fresh sales channels and cushioning the impact of a bruised home market, but trade-policy decisions in Washington and other economic blocs remain a major wildcard for the company's future business. For now, the Senate's postponement offers breathing room rather than resolution—and the market is treating it accordingly.