BYD's Dual-Pronged Strategy: Aggressive Financing Meets European Surge

BYD launches aggressive 0% financing in China to counter falling sales, while its European registrations surge 165% in January, overtaking Tesla in a declining market.

The Chinese electric vehicle giant BYD is deploying a multi-faceted approach to navigate contrasting market dynamics. In its home market, the company has launched an aggressive new financing initiative to stimulate demand, while simultaneously posting remarkably strong growth in Europe, where it has overtaken a key competitor.

European Operations Defy Broader Market Trend

While facing headwinds domestically, BYD's European expansion is accelerating at a notable pace. According to data from the European Automobile Manufacturers' Association (ACEA), BYD's new vehicle registrations across the EU, the UK, Iceland, Liechtenstein, Norway, and Switzerland surged to 18,242 units in January. This figure represents a substantial 165% increase from the 6,884 units registered in the same month a year prior, as reported by Reuters.

This performance allowed BYD to outsell Tesla in Europe for the month, based on figures cited by The Wall Street Journal. Tesla's registrations fell by 17% to 8,075 units, marking the 13th consecutive month of declining numbers for the U.S. automaker in the region. The broader European market also contracted, with overall new passenger car registrations down 3.5%. Major European manufacturers lost ground, with Volkswagen registrations falling 3.8% year-over-year, BMW down 5.7%, and Renault declining 15%. Sales of gasoline-powered vehicles saw a particularly sharp drop of approximately 26%.

Zero-Interest Financing Aims to Revive Domestic Sales

In response to softening demand in China, BYD has introduced a competitive new financing program effective from last Wednesday through the end of March. The offer provides 0% interest for three years on several popular electric and plug-in hybrid models, with an alternative "ultra-low" interest rate available for a seven-year term. Reports from Electrek indicate the daily payment can start as low as 29 Yuan, with no down payment required. Models included in the promotion are the Seagull, Dolphin, and Sealion 05 EV.

This move follows a similar seven-year financing offer initiated by Tesla in January. Subsequently, more than ten other automakers, including Xiaomi, Geely, Li Auto, XPeng, and NIO, have introduced comparable deals, highlighting the intense competition in China's EV sector. The pressure is evident in BYD's sales figures; Reuters noted a 30% year-over-year decline in the company's China deliveries for January—the sharpest monthly drop since February 2024 and the fifth consecutive month of falling domestic sales.

Infrastructure Expansion and Market Volatility

Beyond financing, BYD is betting on charging technology to support its growth. The company has commenced large-scale deliveries of its new "Megawatt" fast-charging stations in China, as reported by CnEVPost and CarNewsChina. These stations are designed to achieve a peak power output of 1,360 kW, potentially adding around 400 kilometers of range in just five minutes. A Deutsche Bank study cited this infrastructure expansion as a key driver for a potential sales recovery, projecting 4.9 million vehicle sales for BYD in 2026.

The company's Hong Kong-listed shares have shown recent volatility. After falling 6.91% on February 2 following the release of weak January delivery numbers—with prices dipping to around HK$88.50 in early February—the stock recovered somewhat. It gained 4.87% to HK$100.10 on February 23 and was trading at HK$98.75 two days later, according to Investing.com.

Additional market sensitivity arose from a brief U.S. regulatory development. On February 13, the Pentagon temporarily published an updated list of "Chinese military companies" under Section 1260H, which for the first time included BYD alongside Alibaba and Baidu. Reuters reported that the entry was withdrawn from the Federal Register without explanation later the same day.

As BYD's financing campaign continues in China until March's end, market observers will be watching to see if the combination of attractive payment plans and rapid charging infrastructure can stabilize domestic demand. Meanwhile, the latest ACEA data confirms the company is gaining significant momentum in the European market.