BYD Stock: January Sales Hit Two-Year Low as China’s EV Market Cools

TLDR

• BYD sold just 83,249 battery electric passenger cars in January, the lowest monthly total since February 2024
• China reinstated a 5% purchase tax on new energy vehicles starting January 1, ending over a decade of tax exemptions
• Geely has climbed to second place in China’s EV market with over 270,000 vehicles sold in January
• BYD’s exports dropped to 100,482 vehicles in January from 133,172 in December
• At least six major Chinese EV brands reported sharp month-over-month sales drops in January

The world’s largest electric vehicle maker just hit a speed bump. BYD reported its weakest monthly battery electric car sales in nearly two years, selling 83,249 units in January out of total vehicle sales of 205,518, which includes plug-in hybrids.

The January figure marks the lowest monthly performance since February 2024 when the company sold 121,748 vehicles. The slowdown comes as China’s electric vehicle market faces mounting pressure from policy changes and fierce competition.

BYD Company Limited, BYDDY

Starting January 1, China reinstated a 5% purchase tax on new energy vehicles. This ends an exemption from the full 10% vehicle purchase tax that had been in place for more than a decade. The tax change could prompt consumers to delay purchases, according to Helen Liu, partner at Bain & Company.

The timing complicates the picture somewhat. China’s economic figures for the first two months typically show volatility due to the Lunar New Year holiday falling on different dates each year. Analysts are watching first-quarter numbers closely to gauge the true extent of the slowdown.

Tu Le, founder of consulting firm Sino Auto Insights, said the market will slow but the full impact won’t be clear until after the first quarter ends.

Competition Heats Up

BYD’s struggles come as rivals gain ground. Geely has moved into second place in China’s electric car market, selling more than 270,000 vehicles in January. This includes its Galaxy and Zeekr electric brands plus exported vehicles, with overseas shipments exceeding 60,000 units.

Geely expects overall new energy vehicle sales to reach 2.22 million cars in 2026, up 32% year over year.

Other competitors posted strong year-over-year gains. Aito, which uses Huawei’s operating system, delivered more than 40,000 vehicles in January, up over 80% from a year earlier. Leapmotor and Nio also saw deliveries rise to 32,059 and 27,182 respectively.

Smartphone maker Xiaomi recorded more than 39,000 electric car deliveries last month. That’s up year over year but down from over 50,000 in December. The company plans to upgrade its SU7 sedan in April.

Not every brand is thriving. Xpeng reported just 20,011 deliveries in January, well below its 2025 monthly average of more than 35,000 vehicles. Li Auto deliveries fell to 27,668 units.

Le noted that companies like Geely have taken sales on the low end where BYD traditionally dominates. The automaker faces pressure not from one competitor but several vying for the same market.

Export Numbers Slip

BYD’s export business also cooled in January. The company shipped 100,482 vehicles overseas, down from 133,172 in December.

BYD told reporters late last month it plans to boost overseas sales by nearly 25% this year to 1.3 million cars. The company has not released a full-year domestic sales target.

Last year, BYD sold 4.56 million new energy vehicles total. In the previous year, it overtook Tesla to become the world’s largest seller of battery-powered electric cars, delivering 2.26 million units, nearly 28% more than a year earlier.

By mid-2024, new energy vehicles accounted for more than half of all new passenger car sales in China.

Market-Wide Slowdown

The January weakness reflects broader market trends. New energy vehicle sales grew just 2.6% year over year in December, marking a third consecutive month of slowing growth according to China Passenger Car Association data.

The autos sector supports about 30 million jobs in China, more than one-tenth of urban employment. However, Fitch Ratings economist Alex Muscatelli noted that autos accounted for just 3.7% of fixed asset investment last year, compared with 23% for real estate.

Cameron Johnson, senior partner at Tidalwave Solutions, said many in the industry expect Beijing to reinstate some or all subsidies if the sector worsens further. China’s top leaders are expected to release policy targets at an annual parliamentary meeting in March.

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