BYD Company Limited’s stock registered a notable advance in Hong Kong trading this Tuesday, climbing approximately 4%. This upward movement coincides with a period of both supportive analyst commentary and escalating legal challenges for the Chinese electric vehicle giant. The broader operational landscape presents a mixed picture, characterized by robust sales in one key market and emerging headwinds in another.
Analyst Advocacy and Policy Support
In a research note dated February 10, 2026, HSBC Research reaffirmed its “Buy” recommendation for BYD, attaching a price target of 139 Hong Kong dollars. The analysts pointed to a valuation gap they consider increasingly difficult to justify. They noted that BYD’s market capitalization now sits at roughly one-fourteenth that of Tesla, a disparity that has widened over the preceding half-year. Given that both firms hold dominant positions within the global EV sector, HSBC characterized this discount as “unreasonable.”
The financial institution contrasted the strategic approaches of the two automakers, highlighting BYD’s emphasis on mass production and worldwide market growth versus Tesla’s concentration on breakthrough innovation. From this perspective, HSBC views the current valuation penalty applied to the Chinese manufacturer as excessive.
This optimistic analyst stance was further buoyed by supportive signals from Chinese authorities. Following a symposium convened by the nation’s commerce ministry on February 9, where officials hinted at additional supportive measures for the vehicle sector, automotive stocks in Hong Kong experienced broad-based strength.
Legal Challenge Against U.S. Tariffs
Running parallel to these positive financial developments is an intensifying dispute with U.S. regulators. BYD has initiated legal action at the U.S. Court of International Trade, contesting punitive tariffs levied under the International Emergency Economic Powers Act (IEEPA). The complaint, filed on January 26, 2026 under docket number 26-00847, seeks to overturn the tariff rulings and secure a refund of duties paid since April 2025.
Should investors sell immediately? Or is it worth buying BYD?
While BYD does not sell passenger cars in the United States, it maintains a commercial vehicle manufacturing facility in Lancaster, California, through subsidiaries including BYD Motors and BYD Coach & Bus. This operation employs about 750 individuals and relies on imported components that are subject to the disputed tariffs. This lawsuit marks the first direct legal challenge from a Chinese automaker specifically targeting these tariff measures.
Contrasting Regional Performance
Operational data reveals divergent trends across different geographies. During January 2026, BYD achieved significant sales momentum in Australia, delivering 5,001 vehicles and substantially outperforming Tesla’s 501 units in that market. This represents a year-over-year increase of 641% for BYD.
Conversely, the competitive environment in Japan is becoming more challenging. Recent adjustments to the nation’s subsidy framework are increasingly favoring rival manufacturers, thereby applying pressure to BYD’s pricing strategy in that region.
Key Data Points:
* Share Price Movement: Gained ~4% in Hong Kong on February 10, 2026
* HSBC View: “Buy” rating with a 139 HKD target price
* U.S. Litigation: Case 26-00847 against the U.S. government, filed January 26, 2026
* Australian Sales: 5,001 units sold in January 2026
* U.S. Operations: Manufacturing plant in Lancaster, CA (~750 employees, commercial vehicles)
The coming weeks will indicate whether the market reassessment outlined by HSBC gains broader traction or if regulatory uncertainties temper the stock’s upward trajectory.
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