BYD’s Global Expansion Strategy Signals Potential Recovery

While facing headwinds in its domestic market, Chinese electric vehicle manufacturer BYD is responding with an aggressive international growth plan that could revitalize its business prospects. According to a recent Citi research report following management discussions, the company aims to dramatically increase its overseas vehicle sales to 1.6 million units by 2026—a substantial jump from the 900,000 to 1 million units projected for 2025.

BYD's ambitious overseas push comes at a critical juncture. The automaker reported disappointing earnings for the third quarter of 2025, with profitability squeezed by intense price competition within China. October brought additional concerns as the country's passenger vehicle market contracted for the first time in eight months, highlighting the challenging environment facing domestic automakers.

European Operations Show Promising Momentum

Europe has emerged as a particularly bright spot in BYD's global strategy. The company's sales figures across the continent have surged dramatically, with the automaker even surpassing Tesla in certain markets including the United Kingdom and Germany. This European success is being driven by BYD's strategic focus on introducing premium brands such as Denza and Yangwang to capture market share.

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

The company is already constructing a manufacturing facility in Hungary, with additional production sites in development. Market experts at Goldman Sachs have identified international operations as the primary driver for future earnings growth, projecting that overseas markets could contribute approximately 60 percent of the corporation's total profits by 2028.

Capital Expenditure Plans Indicate Stabilization

An important development in BYD's financial strategy involves planned reductions in capital investment. Following the fourth quarter of 2025, the company intends to significantly decrease its expenditure, indicating that production capacity will have reached levels sufficient to meet demand. This move is viewed by market observers as a positive signal for margin stabilization in the coming periods.

Trading activity reflected cautious investor sentiment on Tuesday, with BYD shares declining 0.7 percent to $13.04 in NASDAQ OTC trading. From a technical analysis perspective, the stock appears to be entering a consolidation phase following its decline since May. Market technicians note that surpassing the 50-day moving average would represent a significant indicator for a sustained trend reversal.