BYD shares tumble, signaling deepening woes for China’s electric vehicle industry
HONG KONG – BYD shares plummeted to their lowest level in at least a year Monday, leading a broad sell-off of Chinese automakers following weak January sales and changes to government subsidy programs that have pressured low-cost brands.
The decline underscores mounting investor concerns that Chinese car manufacturers are entering a period of prolonged stagnation as domestic demand softens and government support fades.
BYD’s Hong Kong-listed shares fell 6.9% to close at 91 Hong Kong dollars ($11.70), marking the stock's largest single-day percentage drop since May 26, 2025. The company’s Shenzhen-listed shares also fell 4.2%.
Eugene Hsiao, a strategist at Macquarie Capital, said the magnitude of the domestic decline likely caught investors by surprise and suggests a significant loss of market share.
Other major players in the sector also saw losses, with shares of Geely, Leapmotor, Xiaomi, and Xpeng falling between 1.2% and 6.8%.
Saigon Sentinel Analysis
The recent sell-off in shares of BYD and its Chinese electric vehicle peers is more than a momentary market correction; it marks the definitive end of a growth era fueled by Beijing’s aggressive state subsidies. As the world’s largest automotive market cools, the industry is entering a volatile new phase characterized by a brutal domestic price war, a narrowing technological moat between rivals, and the diminishing returns of using exports to offset flagging domestic demand.
For national champions like BYD, the pivot to international markets has transitioned from a strategic expansion to an existential mandate. This shift carries profound implications for Southeast Asian markets, particularly Vietnam. As Chinese manufacturers grapple with domestic saturation and mounting overcapacity, they are increasingly likely to use the region as a vent for surplus inventory, deploying aggressive pricing strategies to capture market share.
This trend poses a direct structural challenge to VinFast. The Vietnamese automaker is set to face a wave of Chinese competitors who are not only leveraging massive economies of scale but are also operating with the desperation of players "pushed to the wall" in their home market. As these Chinese firms export their price-cutting tactics to Vietnam, the regional EV landscape is bracing for a period of unprecedented competitive intensity that will test the margins and resilience of domestic incumbents.