BYD Stock: Sales Plunge to Two-Year Low as China’s EV Market Struggles

TLDR

• BYD’s battery electric passenger car sales dropped to 83,249 units in January, the lowest since February 2024
• China ended its decade-long tax exemption on EVs, reinstating a 5% purchase tax from January 1
• Competitor Geely sold over 270,000 vehicles in January and now holds second place in China’s EV market
• BYD’s overseas shipments fell to 100,482 vehicles from 133,172 in December
• New energy vehicle sales growth slowed to just 2.6% in December, marking three consecutive months of deceleration

China’s leading electric vehicle maker is facing its toughest start to a year in recent memory. BYD sold just 83,249 battery electric passenger cars in January, marking the company’s weakest monthly performance since February 2024.

The decline comes at a critical time for China’s EV industry. Total vehicle sales including plug-in hybrids reached 205,518 units, but the battery electric segment showed clear weakness.

BYD Company Limited, BYDDY

January brought a major policy shift. China reinstated a 5% purchase tax on new energy vehicles starting January 1. This ends more than a decade of tax exemptions that helped fuel the country’s electric vehicle boom.

The timing adds complexity to the data. Economic figures in China’s first two months typically fluctuate due to the Lunar New Year holiday. Analysts are waiting for first-quarter results to determine whether this represents a temporary dip or a longer-term trend.

Rivals Making Gains

Geely has emerged as a serious threat to BYD’s dominance. The automaker sold more than 270,000 vehicles in January, including its Galaxy and Zeekr electric brands. Overseas shipments alone exceeded 60,000 units.

The company projects 2.22 million new energy vehicle sales in 2026, representing 32% growth year over year.

Other competitors posted strong numbers. Aito, using Huawei’s operating system, delivered over 40,000 vehicles in January, up more than 80% from a year ago. Leapmotor and Nio reported deliveries of 32,059 and 27,182 respectively, both showing year-over-year increases.

Xiaomi delivered more than 39,000 electric cars last month. While up from a year earlier, the figure fell from December’s 50,000 deliveries ahead of an April upgrade to its SU7 sedan.

The picture wasn’t positive across the board. Xpeng managed just 20,011 deliveries, well below its 2025 monthly average of 35,000 vehicles. Li Auto deliveries dropped to 27,668 units.

Tu Le from Sino Auto Insights noted that Geely’s Galaxy brand has captured sales in the budget segment where BYD traditionally dominates. The company now faces pressure from multiple competitors rather than a single rival.

Export Business Weakens

BYD’s international sales also declined. January exports totaled 100,482 vehicles, down from 133,172 in December.

The company has set an overseas sales target of 1.3 million vehicles for 2026, representing nearly 25% growth. However, no full-year domestic sales target has been announced.

Last year BYD sold 4.56 million new energy vehicles. The company previously overtook Tesla as the world’s largest battery-powered electric car seller, delivering 2.26 million units with nearly 28% annual growth.

By summer 2024, new energy vehicles comprised more than half of all new passenger car sales in China.

Market Outlook

The broader market shows similar weakness. New energy vehicle sales grew just 2.6% year over year in December according to China Passenger Car Association data, the third straight month of slowing growth.

Cameron Johnson from Tidalwave Solutions said industry contacts expect Beijing may reinstate subsidies if conditions worsen. China’s leadership will outline policy priorities at a parliamentary meeting in March.

The auto sector employs approximately 30 million people in China, representing over one-tenth of urban employment. Fitch Ratings notes autos accounted for 3.7% of fixed asset investment last year versus 23% for real estate.

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