The world’s leading electric vehicle manufacturer, BYD, has encountered a significant hurdle at the start of 2026. Newly released sales figures for January have revealed a substantial drop, amplifying existing investor concerns regarding intensifying competition within its crucial domestic market and placing noticeable pressure on its stock price.
Intensifying Domestic Competition and a Key Rival
Beyond seasonal factors, the competitive landscape in China is becoming increasingly fierce. Industry reports indicate that rival automaker Geely delivered approximately 124,252 electric and hybrid vehicles within China during January. This figure suggests Geely may have, for the first time, surpassed BYD’s domestic-only sales (excluding exports).
Geely’s Galaxy series is gaining momentum, while new market entrants like Xiaomi and Leapmotor are applying additional pressure with aggressive pricing strategies. The competitive response is also global; in South Korea, Kia has reduced prices by up to 3 million Won (around $2,000 USD) to counter the threat posed by BYD and Tesla.
A Detailed Look at the January Sales Slump
The data for the first month of 2026 presents a sobering picture. BYD’s global vehicle deliveries totaled 210,051 units, representing a steep decline of roughly 30 percent compared to January 2025, which saw about 300,500 units sold.
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The month-over-month contrast is even more striking. Following the typical year-end surge in December 2025, deliveries nearly halved. Analysts point to a confluence of reasons for this sharp contraction:
- Lunar New Year Timing: The early occurrence of the Chinese New Year holiday in 2026 significantly disrupted production schedules and logistics.
- Shifting Incentives: The expiration of certain government subsidies and the conclusion of year-end promotional discounts cooled consumer demand.
- Broad-Based Weakness: The slowdown affected all major segments. Sales of pure battery-electric vehicles (BEVs) fell 34 percent to 83,249 units, while plug-in hybrid (PHEV) deliveries dropped 29 percent to 122,269 units.
Strategic Pivot: International Markets in the Spotlight
In response to mounting challenges at home, BYD is accelerating its international expansion strategy to reduce reliance on the Chinese market. On February 3, 2026, Executive Vice President Stella Li confirmed the company is developing an electric model specifically designed for the Indian market, though no launch timeline was provided.
Concurrently, the automaker is expanding its manufacturing footprint in Southeast Asia. A $130 million USD battery plant is under construction in Vietnam through a partnership with a local firm, initially to serve the commercial vehicle sector. Furthermore, BYD is preparing to launch its new sub-brand, ‘Linghui Auto’, in the second quarter of 2026.
Market Reaction and Investor Sentiment
The weak sales report has translated directly into market performance. Trading on the Hong Kong Stock Exchange on February 4 saw BYD shares priced near 89.20 HKD, extending a monthly loss of approximately 7 to 8 percent. Investor attention is now turning to the full annual business report due in March 2026. A key focus will be whether the company’s ambitious target of 1.3 million export units for 2026 can sufficiently offset the current softness in its domestic operations. The disappointing January results have undoubtedly increased the pressure on BYD’s management to execute its global plans effectively.
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