BYD is accelerating its European manufacturing ambitions while a brutal price war at home continues to erode margins. The Chinese electric-vehicle giant has confirmed that vehicle assembly at its new factory in Szeged, Hungary, will begin in the fourth quarter of 2026, a move designed to sidestep EU import tariffs that threaten to raise costs on vehicles shipped from China. Plans for a separate billion-euro plant in Turkey have been shelved for now, with all resources now concentrated on the Hungarian site.
The timing could hardly be more critical. While BYD’s domestic market share is being squeezed by deep discounting from rivals including Xiaomi and Geely, its overseas business is roaring ahead. In the first half of 2026, UK registrations jumped nearly 95% year-on-year to almost 38,000 vehicles, with June alone accounting for over 6,200 units and a near-3% market share. The plug-in hybrid Seal U DM-i has been a key driver, and three additional models are slated for the second half of the year.
Yet the broader picture remains starkly divided. Global vehicle sales for the first six months reached 1,808,511 units, down 15.72% from the prior year. That headline decline masks a deeper split: domestic deliveries slumped to roughly 1.02 million vehicles — a drop of about 40% — while the export channel surged. In the first quarter, overseas NEV sales represented 45.85% of the total, with 321,165 units leaving China, a year-on-year increase of 55.84%. The management has now lifted its full-year export target to 1.5 million vehicles, a sign that international growth is no longer optional but essential.
The profit fallout has been severe. Net profit for the first quarter fell 55%, and automotive gross margin narrowed from 20.1% to 18.8%. A stronger yuan added 2.1 billion yuan in foreign-exchange losses. The domestic price war forced BYD to offer its deepest rebates in two years in March, squeezing margins for the fourth consecutive quarter.
New products are intended to restore some pricing power. The Great Tang, a seven-seat flagship SUV starting at 250,000 yuan, racked up over 30,000 orders on its first day of sales. It is powered by BYD’s next-generation Blade battery, which the company claims delivers nearly 1,000 kilometres of range. A separate fast-charging network — currently 7,000 stations with plans to reach 20,000 by year-end — is being expanded alongside the European push. The second-gen Blade battery can also recharge a vehicle to 70% capacity in just five minutes.
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On the London front, BYD recently shipped 22 electric double-decker buses, adding to its commercial-vehicle footprint.
The stock has responded with a sharp, if fragile, rally. Shares closed Monday at €9.34, posting a weekly gain of roughly 14.4%. That still leaves the equity down 14.83% year-to-date and far below its 52-week high of €14.80. The 50-day moving average sits at €9.88, and the relative strength index of 51.7 indicates a neutral market rather than an oversold bounce. The 52-week low of €8.03, touched on June 30, now provides a technical floor.
Analyst opinion is split. Goldman Sachs views the first quarter as the trough and has set a 12-month price target, expecting gradual improvement through the rest of 2026. BNP Paribas, however, maintains an “Underperform” rating, pointing to downside risks to earnings forecasts and uncertainty over the pace of margin recovery in China. The French bank’s caution underscores that the current stock recovery may be premature unless the domestic pricing war eases.
All eyes now turn to August 29, when BYD will report second-quarter results. Monthly delivery data between now and then will indicate whether the export engine can close the yawning gap left by the collapse in China sales. Full-year analyst estimates call for earnings of 4.42 yuan per share, but achieving that number depends on two variables: the speed of the overseas ramp-up and whether Beijing’s market finally stabilises.
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