Intro
A few weeks ago, I was walking through the streets of Europe, and something caught my eye. Every other car that passed me was a BYD. It wasn’t a showroom, it wasn’t a promotional event — it was everyday traffic. The scale of BYD’s reach outside China suddenly felt very real. And then, just a few days later, I saw the headline: “BYD Down 30%.”
That contrast stuck with me. How could a company dominating roads across Europe see its stock tumble so sharply? I decided to dig deeper. What followed was a series of days of research, data gathering, analyst reports, government filings, and market commentary. We crafted a debate built on hard numbers, on-the-ground insights, and multiple perspectives. It is designed to give you the full picture, not just a headline. Our goal is simple: to equip you with the clarity you need to make informed, smart investment decisions.
Welcome to today’s topic on BYD. The stock has fallen nearly 30% in recent months, raising the question: is this a golden buying opportunity or a clear signal to cut losses? We have a panel of analysts, strategists, and market commentators with opposing views. Let’s dive in.
Opening Remarks
David Zhang (Equity Analyst, Seeking Alpha — Bullish):
“BYD is misunderstood right now. Yes, the stock is down, but this is precisely when long-term investors should be looking to buy. In August 2025 alone, BYD sold 80,813 vehicles overseas, up 157% year-on-year. That’s nearly a million-unit annualized run rate outside China. This isn’t just growth — it’s exponential global scaling.”
“One advantage that’s often overlooked is BYD’s modular scale strategy. Its e-Platform, now the Super e-Platform, is like Lego for cars. With a strong base and many reusable pieces, BYD can design different models — from entry-level to mid-range — quickly and cost-effectively. This modularity means new launches don’t require reinventing the wheel each time.
Li Wei (Market Commentator, Financial Times — Bearish):
“David, overseas sales growth is impressive, but let’s keep it grounded. In Q2 2025, BYD’s net profit fell 29.9% year-on-year to RMB 6.4 billion — its first quarterly profit decline in more than three years. Revenues rose 14%, yes, but margins collapsed because of relentless price cuts. If the business model only works when slashing prices, then it doesn’t work.”
Profitability, Margins & Financing
Emily Carter (Senior Analyst, TipRanks — Bullish):
“Li Wei, the market is short-sighted. A temporary profit dip doesn’t erase long-term strength. BYD still delivered RMB 200.9 billion in Q2 revenue, and first-half 2025 profits were up 13.8% YoY overall. Analysts agree: 8 out of 10 recommend Buy, 2 Hold, and none Sell. Investors rarely get this kind of consensus on a company trading at 17× forward earnings, a discount to Tesla and BYD’s own history.”
Sarah Johnson (Auto Analyst, Reuters — Bearish):
“Emily, margins aren’t just pressured, they’re collapsing. Gross margin slid to 16.3%. Beyond that, BYD’s financing model is alarming. The government now requires automakers to pay suppliers within 60 days. BYD’s current cycle is 275 days. Accounts payable sit at RMB 400 billion, while cash is just RMB 117.5 billion (likely half encumbered). Inventories are RMB 154 billion (much at risk of write-downs), receivables RMB 53 billion (with dealer defaults looming). If BYD truly adjusts, it may need up to RMB 500 billion in new financing. At 4% interest, that’s RMB 20 billion annually — wiping out nearly half of its ~RMB 50 billion net income going forward.”
Sales Targets, Execution & Market Manipulation
Ravi Menon (Automotive Strategist, AInvest — Bullish):
“BYD has a history of adapting. Even if targets are revised, the overseas momentum offsets domestic softness. We shouldn’t ignore the 157% YoY growth in exports, which positions BYD as the only Chinese EV maker scaling this quickly abroad.”
Kenji Tanaka (Researcher, The Edge Malaysia — Bearish):
“Ravi, exports may not be as clean as they look. Cathie Wood has already pointed out a 20% gap between deliveries and actual registrations — meaning many ‘sold’ cars are sitting idle as so-called zero-mileage second-hand cars. Reports suggest foreign dealers buy cars at low prices to inflate export data so local Chinese officials can claim growth. This risks turning into a credibility crisis for BYD’s reported sales.”
Industry Overcapacity & Pricing Pressure
David Zhang (Bullish):
“BYD has brand strength and economies of scale. Overcapacity hurts weaker players more than BYD, since it can cut costs through vertical integration while competitors struggle.”
Li Wei (Bearish):
“David, overcapacity hurts everyone. China’s auto capacity utilization is barely 50%. That forces price wars, subsidies, and dealer incentives. Even BYD can’t escape this doom loop. Worse, it has to roll out new models every year, slashing prices on older ones. European brands can hold cycles for 5–10 years, but BYD is stuck in annual refreshes that destroy margins.”
Global Expansion & Trade Barriers
Emily Carter (Bullish):
“Europe is BYD’s next frontier. With plants in Hungary (2026) and Turkey (2026), it will localize production and eliminate tariffs. Europe’s EV market grew 48% YoY in August 2025. BYD is aligning capacity with demand.”
Sarah Johnson (Bearish):
“Emily, you’re overlooking today’s reality. Until 2026, tariffs remain a massive drag: 17% EU anti-subsidy duties + 10% import duty. BYD loses margin on every car exported from China. And just last week, Reuters reported BYD is slowing production and delaying China factory expansions due to weak demand. That doesn’t sound like a growth juggernaut.”
Dealer Health & Market Trust
Ravi Menon (Bullish):
“Dealer challenges are normal in an evolving market. BYD’s overseas network is still being built. Over time, local partnerships will stabilize distribution and reduce overstocking risks.”
Kenji Tanaka (Bearish):
“Normal? Dealers are collapsing. Reports and videos show dealers bankrupt, overstocked, and unable to move inventory. If dealers can’t pay receivables, BYD faces write-offs and even more financing needs. Competitors like Great Wall are openly accusing BYD of dirty practices in the price war. This erodes trust and could provoke even harsher regulatory scrutiny.”
Valuation Debate
David Zhang (Bullish):
“At today’s valuation, the risk/reward looks attractive. The P/E is around 17× forward earnings, cheaper than peers. Investors are being compensated for the near-term turbulence.”
Li Wei (Bearish):
“David, you’re ignoring reality. On a trailing basis, BYD trades at 23× earnings. If financing costs rise and net income is halved, that multiple effectively doubles to over 40×. Considering all these structural risks, the stock should trade at a fraction of today’s price.”
Balanced Perspective
Maria Lopez (Columnist, Bloomberg — Neutral):
“This is one of the toughest calls in global autos. On the one hand, BYD’s export growth, modular platform advantage, scale, and integration are undeniable strengths. On the other, the financing risks, regulatory scrutiny, dealer weakness, and overcapacity are undeniable threats. BYD is either the future global EV leader, or it is caught in a self-destructive cycle of price wars and debt. The truth may be somewhere in between, but investors need to decide which risk weighs more heavily.”
Retail Investor Takeaways
For individual investors, here are guiding considerations:
Financing Risk: With RMB 400b in payables and cash constraints, BYD may need to raise up to RMB 500b in debt. This could add RMB 20b annual interest expense, nearly halving net income. Conservative investors should watch capital-raising moves closely.
Market Growth vs. Manipulation: Overseas sales are booming, but credibility questions (delivery-to-registration gap, zero-mileage exports) mean investors must separate genuine demand from accounting optics.
Overcapacity Headwinds: With utilization at 50%, the industry faces relentless price pressure. BYD’s model cycles force annual cuts, unlike global peers who sustain models for years.
Execution Strength vs. Regulatory Risk: BYD is a massive execution machine. Debt, competition, and operations are areas it has consistently managed well. The two biggest threats are:
Chinese regulatory stance: If regulators tighten further on price wars or financing practices, growth could stall.
European expansion: If the Hungary and Turkey plants launch smoothly, BYD will reduce dependency on China and lift margins.
Macro Headwinds: China’s economy is currently weak:
Retail Sales: miss
Unemployment Rate: miss
Industrial Production: miss
Fixed Asset Investment: miss
Personally(not an advice)
Investor Note: Personally, I view BYD as an execution powerhouse that can manage debt, competition, and operational pressures. The real risks are regulatory overreach in China and execution of the European expansion. If regulators ease off and Europe ramps as planned, the stock could deliver strong gains. Given current valuations and macro weakness in China weighing on sentiment, I would start accumulating gradually on dips with a target of 50–60% upside over the next 18–24 months.