BYD’s Diverging Fortunes: Record Exports and Record Short Bets Collide

BYD sets new export record in April as domestic sales slip, prompting aggressive short selling; US bill and inventory overhang add to uncertainty.

April painted a conflicting picture for BYD. The Shenzhen-based electric-vehicle giant shipped a record 134,500 cars abroad, yet short sellers in Hong Kong piled on bearish bets with unusual intensity. The stock fell 2.8% to HK$97.05 on turnover of 13.7 million shares, reflecting the market’s struggle to reconcile two opposing narratives.

Home market loses momentum

On the domestic front, BYD’s retail sales in China reached 181,500 vehicles in April, according to insurance registration data. That represented a 1.6% month-on-month decline — and stood in stark contrast to the broader new-energy vehicle (NEV) market, which expanded 2.6% over the same period. The company lost relative ground in its home territory just as the NEV segment claimed a record 53.2% share of all new-car sales in China.

The overall auto market offered little comfort. Total passenger and commercial vehicle sales in China tumbled 21.6% in April to 1.4 million units. Within that, NEV production and sales each topped 1.3 million units, with sales up 9.7% year on year. BYD’s domestic performance lagged the sector’s tailwinds.

Short sellers sharpen their knives

The weakness attracted aggressive short-selling activity. On Tuesday, short sales in BYD’s Hong Kong-listed shares reached HK$611.8 million, pushing the short-selling ratio to 130.83% of daily turnover — a level far beyond typical hedging and signaling outright bearish conviction.

The catalyst was a disastrous first quarter. Net profit plunged 55% to about 4.09 billion yuan, squeezed by a brutal price war in China’s EV market. Short sellers appear to be betting that the margin pressure is far from over.

Record exports offer an escape valve

Yet BYD’s international business provided a bright spot. April overseas deliveries hit 134,500 vehicles, a new all-time high. For the first time, exports accounted for more than 40% of the company’s monthly total. Overall group sales reached 321,123 units in April, up roughly 7% from March, with Europe and Latin America absorbing the bulk of outbound shipments.

The export surge partially offset a 21.5% contraction in China’s overall passenger-vehicle market — but it also highlights a growing dependence on foreign markets at a time when geopolitical risks are rising.

Washington throws up new barriers

On May 11, the US Congress introduced the “Connected Vehicle Security Act of 2026,” a bipartisan bill designed to bar Chinese-made vehicles and connectivity technologies from the American market on national security grounds. The legislation lands as high-level US-China trade talks convene in Beijing, but legislative momentum in Washington often runs independently of diplomatic engagement.

The bill’s fate remains uncertain, yet it underscores the fragility of BYD’s export-led growth story if major Western markets begin erecting permanent barriers.

Inventory overhang persists

Back in China, Citi drew attention to a lingering inventory challenge. At the end of April, dealership inventories stood at roughly 399,000 vehicles. The stock cover edged up to 2.2 months from 2.1 months in March — not a crisis, but a clear signal that demand needs to accelerate to prevent further accumulation.

Citi set a critical benchmark for June: BYD must sell 383,000 vehicles in China to achieve positive year-on-year growth. Missing that target would likely intensify scrutiny on dealer inventories and pricing pressure.

Premium push aims to rebuild margins

JPMorgan sees BYD’s management steering toward a richer product mix. By the fourth quarter of 2026, the bank expects more than 30% of domestic sales to come from models priced above 200,000 yuan. Both Goldman Sachs and Nomura view the first quarter as the trough for both profit and sales, anticipating a gradual recovery driven by new fast-charging technology and higher-margin vehicles.

The second half of the year will be the real test: whether the premium shift can gain traction and whether export momentum can sustainably offset the domestic headwinds. For now, the bulls and the bears each have compelling data points — and BYD’s shares are caught in the middle.