BYD - Full-Stack Globalization

China’s EV and supply-chain strengths are expanding overseas, and Chinese automakers are moving beyond vehicle exports toward a global strategy built on localized manufacturing and brand development. Industry estimates put Chinese automakers’ global sales at about 27mn units in 2025, surpassing Japan for the first time and ranking number one worldwide. BYD (1211.HK, HK$99.20, HK$904bn) reported 2025 exports of over 1mn units, reinforcing its leadership in the global NEV market and strengthening the influence of Chinese brands in the global auto landscape.

Based on CPCA data, global auto sales reached 87.66mn units in 11m25, with 20.33mn units of new energy vehicles (NEVs). NEV penetration rose from 26.3% in 2024 (BEV 12.8% / PHEV 7.1% / HEV 6.4%) to 30% (BEV 15.3% / PHEV 7.9% / HEV 6.8%). The mix improvement was led by BEVs, which contributed the most to the overall penetration increase.

The U.S. and Europe provide a representative comparison:

United States: NEV passenger-vehicle sales totaled 1.41mn units in 11m25 (+6% YoY). Penetration edged up from 9.7% to 9.9%, suggesting slower growth and adoption, likely due to reduced subsidies and higher tariffs affecting both demand and supply.

Europe: NEV passenger-vehicle sales reached 3.3mn units during the same period (+30% YoY). Penetration increased from 18% to 25%, driven by tighter carbon rules, purchase incentives, and continued charging and related infrastructure build-out that improves convenience.

Overall, Europe’s NEV adoption is advancing much faster than the U.S., mainly due to differences in policy support and industry infrastructure.

Against this backdrop, BYD is the clear global NEV leader, with 23% market share among NEV OEMs and an 18% share in BEVs. Its global volumes have surpassed Tesla’s, while Tesla’s BEV share has fallen from a peak of 22% to 12%, reflecting intensifying competition and share reallocation.

During the period, Mexico became BYD’s largest export destination with 116,197 units, followed by Brazil and Belgium. Emerging markets including Indonesia, Turkey, the UAE, and the Philippines also grew strongly, pointing to broader multi-regional expansion.

This is supported by BYD’s global platform build-out. It has production and commercial footprints across five continents: Hungary (Europe), Southeast Asia and the Middle East (Asia), Morocco (Africa), Mexico (North America), and Brazil (South America). Based on commissioned and planned projects, overseas capacity is estimated at at least 1.7mn units. Its retail network spans 90+ countries and 1,800 outlets. To strengthen export execution during the ramp-up phase, BYD has invested in eight dedicated car carriers, each with capacity of at least 7K vehicles per voyage.

Overall, BYD has transitioned from a vehicle exporter to an integrated global operating platform anchored by localized production, go-to-market channels, and brand equity.

Our views: BYD’s vertically integrated manufacturing base and broad global footprint translate into strong cost control, fast product iteration, and reliable delivery execution, underpinning competitive positioning and sustained overseas share gains. While domestic sales in 2026 may face higher pressure, overseas volumes will be the key for incremental revenue. Importantly, overseas GPM is close to 20% and higher than the domestic level.  The shift towards overseas markets is also positive to the overall margins and earnings quality. Overall, we remain positive on BYD’s overseas growth potential and the company is trading at 17x 2026E P/E. (Research Department)