BYD Weighs a 45% UK Tariff Threat While Refreshing Its Lineup and Fixing a Software Flaw

London is considering raising duties on Chinese-made EVs from 10% to as much as 45%, a threat to BYD's fast-growing UK sales.

London is quietly weighing whether to drag its electric-vehicle import regime closer to Brussels' — a move that would raise duties on Chinese-made cars from 10% to as much as 45%. For BYD, the timing is awkward: Britain has become one of its most productive overseas battlegrounds, and any tariff alignment would land squarely on that growth.

According to reports in The Times and The Guardian, UK business secretary Jonathan Reynolds is balancing protection for domestic carmakers against the country's climate ambitions. No new levies have been formally agreed. One driver behind the deliberations, The Guardian notes, is access to European industrial programs: London wants a seat at the EU's planned "Made in Europe" initiative. In Brussels, additional duties on China-built EVs have been in force since October 2024, with BYD carrying a combined rate of 27%.

A Market That Matters

The stakes for BYD in Britain are concrete. Between January and September 2026, the carmaker registered roughly 68,000 new vehicles there. In September alone it captured a 5.75% market share, ranking as the second-largest brand behind Volkswagen.

That performance is part of a broader overseas surge. Data from manufacturer association ACEA show BYD's new registrations across the EU, EFTA and the UK climbing 144.1% year on year to 234,099 units between January and August 2026, lifting its share of the combined region to 2.5%.

To insulate itself from future trade barriers in Western markets, the company is building production capacity abroad. It is investing in local manufacturing in Hungary to sidestep EU tariffs, and in Brazil it is targeting an eventual annual capacity of 600,000 vehicles at its Camaçari plant.

Beyond those core markets, BYD keeps widening its footprint. Management said yesterday that the Racco microcar, originally developed for Japan, will also be offered in Sri Lanka and Macau. On September 30, the group opened its 38th European market, in North Macedonia. Trade-policy uncertainty has nonetheless weighed on investor confidence: the stock is down 20% since the start of the year.

Fresh Metal for the Mid-Size Fight

Product news has been arriving in parallel. On September 28, BYD previewed the second generation of its Seal 07 sedan, which will be sold with two powertrain options — a pure battery-electric version and a plug-in hybrid. Pricing and an exact launch date were not disclosed. Refreshing established nameplates is central to the company's effort to defend share in the fiercely contested mid-size segment and reach new buyers.

Operationally, the group marked a milestone on September 29, building the ten-millionth vehicle of its Dynasty series — the flagship Da Han sedan, whose market launch is set for October 13.

There was also a technical hiccup to address. On Saturday, BYD confirmed a software vulnerability in the Shark 6's infotainment system that had allowed an unauthorized app to be installed. The company said it would deliver a fix over the air once internal checks are complete.

Mixed Sales, a Downgrade, and a Modest Rebound

Those initiatives meet a patchy operating picture. Monthly figures show sales of vehicles with alternative powertrains rising 16.98% year on year in September to 463,561 units — a high for the year. Over the first nine months, volume reached 3,131,576 units, slightly below the prior-year level.

Sentiment in the sector has cooled accordingly. About a week ago, JPMorgan downgraded the stock from Overweight to Neutral and cut its price target to 88 HK$ from 124 HK$. Whether the newly unveiled models can support sales in the months ahead is now the key question for investors.

In today's session the shares held their ground at EUR 8.45, putting them 5.2% above their 52-week low of EUR 8.03.