The Chinese electric-vehicle titan BYD is pursuing a dual-track expansion strategy that pits a brutal domestic price war against a torrent of overseas demand. On one hand, it is negotiating the acquisition of underused European factories — including potential Stellantis sites in Cassino and Mirafiori — to skirt EU tariffs and accelerate its local footprint. On the other, it is trying to plug a 55% plunge in first-quarter net profit as China’s market turns increasingly hostile.
Stella Li, BYD’s vice president, confirmed the talks on the sidelines of a London conference. The company wants to operate any acquired plants independently; joint ventures are off the table. The Italian factories in question have been struggling: Cassino produced barely 3,000 vehicles in the first quarter, and production there is halted most days. A Stellantis spokesman declined to comment on “market rumors,” saying only that industry-wide discussions are routine.
The logic is simple. Brussels imposed punitive tariffs of up to 35% on Chinese-made EVs in 2024, making local assembly essential. At the same time, European automakers from Stellantis to Renault are saddled with overcapacity, high costs and weak demand — a combination that makes unwanted plants available at potentially bargain prices. BYD is also considering buying distressed European brands outright, Li added.
Home Front Bleeds as Price War Intensifies
On the other side of the ledger, BYD’s domestic business is under severe strain. Net profit in the first quarter of 2026 tumbled 55% year-on-year to 4.09 billion yuan, while revenue also shrank. A savage price war, the phase-out of government subsidies, and rising supply-chain costs have crushed margins. Sales of passenger cars in China fell for the eighth consecutive month in April.
The company has fought back by raising prices for optional Smart-Driving Upgrades by more than 20% and rolling out new models with improved battery technology. Management is banking on a core operating profit in the double-digit billions of yuan for the second quarter — but only if pricing on the home market stabilizes.
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Meanwhile, the stock is languishing near its 52-week low in Hong Kong. The H-shares currently trade around HK$98, with the next technical support level at roughly HK$97. Analysts remain broadly optimistic, however. A consensus of 25 experts puts the average price target at HK$124, while Citigroup retains a buy rating and a target of HK$142.
Exports Hit Another Record
Beyond China’s borders, the picture is dramatically different. In April, BYD shipped 135,000 vehicles overseas — a record and a 70% jump from a year earlier. International sales now account for 43% of monthly deliveries. The momentum is especially visible in Latin America and Europe.
In Brazil, BYD overtook Volkswagen in April to become the country’s top-selling automaker, a landmark for any Chinese manufacturer. In Europe, first-quarter registrations surged 155%, and German dealers logged a record 4,700 BYD vehicles in April alone. In the UK, the brand has already surpassed both Tesla and every European rival.
To sustain that growth, BYD is building its own plants: a factory in Szeged, Hungary, will open later this year, and a second site in Turkey is scheduled by 2027. Acquiring existing facilities such as Cassino or Mirafiori would accelerate the timeline significantly. It would also help absorb the overcapacity that is dragging down European peers.
The tension between a bleeding home market and a booming export machine defines BYD’s current challenge. For the stock to regain altitude, international volumes must grow fast enough to offset the profit erosion inside China — a trade-off that will be tested in the second half of 2026.
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