BYD Faces a Sharp Decline in Sales and Shares Amid Intensifying Competition

The Chinese electric‑vehicle (EV) manufacturer BYD Co. Ltd. has reported its fifth consecutive month of declining monthly sales, with January figures falling 30 % year‑on‑year to 210,051 units. This downturn has translated into a sharp drop in the company’s Hong Kong‑listed shares, which fell 5.1 % on Monday, closing at HK$92.75—its lowest level in five weeks. The slide is part of a broader sell‑off in China’s EV sector, as demand cools in the world’s largest automotive market.

Sales Momentum Squeezed

  • January slump: The company’s January sales of 210,051 units represent a 30 % decline compared with the same month last year.
  • Export share: Despite the domestic weakness, overseas deliveries remained robust, exceeding 100,000 units and underscoring the importance of export markets for BYD’s overall revenue mix.
  • Export‑dominated Q1 outlook: Analysts project heightened volatility for the first quarter, as the company seeks to offset the domestic slowdown with stronger international demand.

Market Impact

The sales data triggered a sell‑off that reverberated across the Hong Kong market. BYD shares tumbled from a 52‑week high of HK$138.70 (reported on May 22, 2025) to just above HK$92.30, close to the 52‑week low of HK$90.01 observed on January 27, 2026. The 20.6 price‑earnings ratio—already elevated compared with peers—has become a point of concern for investors weighing the company’s valuation against its recent performance.

Strategic Responses

  • Linghui sub‑brand launch: In a bid to diversify revenue streams, BYD unveiled its Linghui brand, aimed at the ride‑hailing market. The sub‑brand will comprise four vehicle models tailored for shared‑transport services. While this initiative signals a proactive strategy to capture new business segments, its impact on short‑term sales remains to be seen.
  • Supply‑chain and production adjustments: The company’s production figures for January also fell, reflecting a tightening of manufacturing output in line with lower demand. BYD has not disclosed detailed cost‑management plans, but market observers anticipate a recalibration of production volumes and a potential focus on higher‑margin vehicle lines.

Investor Sentiment

Financial analysts have expressed mixed views. While some, such as Bernstein, continue to endorse the stock on the basis of long‑term fundamentals and battery‑manufacturing expertise, others highlight the immediate pressure posed by weak sales and intensified domestic competition. The market’s reaction—manifested in the 5‑week low—indicates heightened sensitivity to the company’s monthly performance metrics.

Conclusion

BYD’s latest sales figures and the ensuing share price decline underscore the challenging environment facing China’s EV industry. As the company navigates a confluence of weak domestic demand, external uncertainties, and fierce local rivalry, its strategic moves—particularly the launch of the Linghui brand and potential production adjustments—will be closely watched. Investors and market participants will be looking for clear signals that BYD can reverse the downward trend and restore confidence in its growth trajectory.