BYD Shares Face Pressure as Domestic Sales Slump

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A sharp decline in vehicle deliveries to begin the year has placed significant pressure on Chinese electric vehicle (EV) giant BYD. The company's January figures revealed a substantial drop, triggering an immediate and pronounced negative reaction in the financial markets, particularly on the Hong Kong exchange. This development brings a critical strategic question to the fore: can the company's aggressive overseas push compensate for softening demand in its home market?

Investor frustration was palpable following the release of the January data. BYD's Hong Kong-listed shares closed Monday's session down 7.8% at HK$90.10, marking their lowest closing level since February 2025. The sell-off was not isolated; shares traded in Shenzhen fell 4.3%, and the negative sentiment spilled over to impact other sector players like Xpeng and Xiaomi.

January Delivery Figures Show Steep Decline

The core of the market's concern lies in the monthly delivery numbers. BYD sold 210,051 New Energy Vehicles (NEVs) in January, representing a significant year-on-year contraction of 30.1%. The sequential monthly comparison is even starker, with volume halving compared to December. This marks the fifth consecutive month of declining deliveries.

Production also pulled back, falling approximately 29.1% to 232,358 vehicles. The domestic sales weakness was sufficient for Geely to overtake BYD in monthly sales within the Chinese market for January, highlighting the intensifying competitive landscape for EVs in China.

Overseas Operations Provide a Counterbalance

In contrast to the domestic slowdown, BYD's international business demonstrated relative resilience. January exports surged to 100,482 vehicles, accounting for nearly 48% of total deliveries. This aligns with the company's strategic pivot toward foreign markets, a shift driven in part by cooling domestic demand influenced by reduced subsidies and the planned introduction of a new vehicle purchase tax in 2026.

Management has set an export target of 1.3 million vehicles for 2026, which would constitute a 24% increase over the 2025 goal. Reports suggest, however, that this figure may represent a downward revision from an earlier internal target of 1.6 million. The upcoming launch of a new manufacturing facility in Hungary later this year is expected to provide additional capacity to support this overseas expansion.

New Brand Launch Amid Market Challenges

In a move to diversify its offerings, BYD officially launched "Linghui," a new sub-brand focused on professional ride-hailing and business-to-business (B2B) services. This initiative aims to achieve greater market segmentation and protect the positioning of the company's core passenger vehicle brand.

Key Data Summary:
* January Deliveries: 210,051 NEVs (down 30.1% year-on-year)
* January Exports: 100,482 vehicles (approximately 48% of total deliveries)
* 2026 Export Target: 1.3 million vehicles
* Hong Kong Closing Price: HK$90.10 (down 7.8%)

The central challenge for BYD is now clear: stabilizing its overall performance by leveraging growing international sales and bringing new capacity online—such as the Hungarian plant—to offset the current weaker momentum within China.