BYD’s Battery Division Emerges as a Cornerstone of Corporate Valuation

A fresh assessment from Bernstein Research has cast a spotlight on the immense standalone value of BYD's battery operations. The analysis suggests this single business segment could be worth nearly as much as the entire company's current market valuation. Concurrent market speculation about a potential supply agreement with Ford Motor Company has provided additional positive sentiment for the Chinese electric vehicle (EV) giant.

Bernstein's research places an approximate value of USD 110 billion on BYD's battery division. This figure invites a striking comparison with the group's overall market capitalization, which stands at roughly HKD 947 billion (approximately USD 122 billion). From this perspective, the core automobile manufacturing business—despite BYD's leading position in global EV sales—appears to be attributed minimal value at the current share price.

The firm has set a price target of HKD 130 for BYD's stock, indicating significant potential upside from its recent closing level.

Ford Collaboration Speculation Fuels Optimism

Media reports indicating advanced talks between BYD and Ford have bolstered investor confidence. According to these reports, the American automaker is negotiating to source batteries from BYD for its upcoming hybrid vehicle models.

This potential move aligns with Ford's strategic pivot toward hybrid vehicles, following substantial write-downs totaling around USD 19.5 billion on its pure-electric vehicle projects. Key aspects of the rumored collaboration include:
* The intended use of BYD batteries in Ford manufacturing plants located outside the United States.
* Potential production sites in countries such as Germany, Spain, or Thailand.
* A strategic aim to circumvent specific U.S. trade tariffs.

Securing a supply contract with a major U.S. manufacturer would represent a substantial expansion of BYD's customer base and serve as further international validation of its battery technology.

Should investors sell immediately? Or is it worth buying BYD?

Market Performance and Key Data

Trading on the Hong Kong exchange recently showed a muted response. BYD shares closed at HKD 99.20, registering a modest gain of 0.10%. During the session, the stock fluctuated between HKD 98.95 and HKD 101.60.

A summary of crucial metrics:
* Last Close (Friday): HKD 99.20
* Intraday High: HKD 101.60
* Market Capitalization: ~HKD 947 billion (~USD 122 billion)
* Bernstein Price Target: HKD 130
* Estimated Battery Division Value: USD 110 billion

2026: A Pivotal Year of Proof

Despite the positive rating, Bernstein identifies 2026 as a critical "year of proof" for BYD. The central challenge will be the company's ability to maintain stable profit margins as sheer volume growth becomes less significant.

The domestic Chinese market is expected to become more challenging, driven by:
* The expiration of certain EV tax benefits in China at the beginning of 2026.
* The phase-out of existing vehicle trade-in incentives and direct subsidies for electric cars.

Furthermore, BYD must navigate international trade tariffs and a cooling demand environment at home. In this context, the capability to monetize battery technology through third-party supply agreements—such as a potential deal with Ford—becomes a crucial lever for sustaining profitability as global price pressures in the EV segment gradually normalize.

The upcoming quarterly report will serve as an important benchmark, revealing whether strong delivery numbers can translate into robust earnings within the altered macroeconomic landscape. Bernstein's "Outperform" rating is predicated on the belief that BYD's vertically integrated business model is comparatively more resilient and better positioned to absorb these industry headwinds than many of its competitors.