Chinese electric vehicle (EV) maker BYD (BYDDF) has lost nearly $45 billion in market capitalization over the past four months. The company is struggling to regain investor confidence amid intensifying domestic competition and a heated price war in China. Investors remain concerned over BYD’s aggressive price-cutting strategy, which aims to expand market share but has weighed heavily on profitability.
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Despite these concerns, BYD shares rose nearly 4% in Hong Kong trading today after the automaker reaffirmed its commitment to a 60-day supplier payment cycle. BYD stated that it will prioritize order confirmation, delivery and acceptance, payment and settlement, contract duration, and other critical steps to ensure timely payments.
Shares of other Chinese EV makers also jumped as most of them reiterated similar payment promises. Investors had feared that persistent discounting would drain EV makers’ cash flows, leaving them unable to pay suppliers.
BYD Leads the Price War in China
In its Q2 results, BYD reported a 30% year-over-year drop in net profit, its first drop in three years. BYD also slashed its full-year vehicle delivery target to 4.6 million units, down from 5.5 million targeted earlier. This implies that BYD will still have to sell another 1.7 million autos in the last four months of 2025 to meet even the reduced target.
BYD sparked the heated EV price war in China earlier this year to fend off competition from American rival Tesla (TSLA) and fast-growing domestic rivals like Nio (NIO), Li Auto (LI), and XPeng (XPEV). Moreover, BYD faces an aging lineup of EVs and has delayed the launch of some of its new EV models to 2026, allowing more time for upgrades and improved competitiveness.
Meanwhile, Chinese regulators are becoming increasingly wary of the overly intense competition among its own companies, which is resulting in deflationary pressures and damaging China’s manufacturing reputation. BYD is trying to circumvent these domestic pressures by ramping up production and sales in overseas markets, including Europe, Southeast Asia, and Latin America.
Is BYD Stock a Buy, Hold, or Sell?
Despite the ongoing concerns, analysts remain optimistic about BYD’s long-term outlook. On TipRanks, BYDDF stock has a Strong Buy consensus rating based on eight Buys and two Hold ratings. The average BYD price target of $25.65 implies 91.6% upside potential from current levels.
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