BYD: The Steady Hand in an Unsteady Market
BYD’s vertical integration in LFP batteries, aggressive localization in Europe, and already-priced-in U.S. tariff headwinds can make it more resilient than peers in a tariff-heavy world, although Europe’s duties, evolving Chinese export controls, and currency risks still matter a lot.
1) “Already Tariffed” in the U.S.
The U.S. raised the tariff on Chinese-made EVs to 100 percent in 2024. BYD has no meaningful U.S. sales today, so the damage is mostly opportunity cost rather than a hit to current volumes. Trade press analysis even argued BYD could still price very aggressively if it ever entered. The key idea is that the U.S. headwind is already known and priced, rather than a new surprise.
2) Europe Is the Growth Arena, and BYD Is Localizing
Europe imposed definitive countervailing duties on Chinese BEVs in October 2024. BYD has responded by localizing: a passenger-car plant in Szeged, Hungary is slated to start production around late 2025, with supply-chain partnerships like voestalpine for steel. BYD has publicly stated a plan to localize all EVs for Europe by 2028, which would largely neutralize EU import duties over time. Recent coverage shows rapid share gains, particularly with plug-in hybrids while the market transitions.
What This Means
Duties are a headwind at the point of import. Local production helps bypass them. BYD is making the capital commitments that align with this strategy.
3) Currency Angle
If the dollar weakens, some investors may look at yuan-linked exposures for diversification. That said, RMB assets carry their own policy, convertibility, and settlement risks. BYDDF trades OTC in the U.S. and represents BYD exposure through Hong Kong listed shares, while BYDDY is the ADR. Liquidity, pricing mechanics, and tax treatment differ. Evaluate which line you want to hold before you position.
4) “Cars Are Everywhere” in Europe
There is mounting evidence of BYD’s expanding footprint across Europe and the UK, including fast growth in 2025 and an increasing share in hybrids while the full-EV market normalizes. This supports the view that BYD can win customers even amid tariffs, provided it keeps pricing keen and localizes quickly.
Key Positives
Tariff resilience in the U.S. because there is little to lose today, with upside optionality later if policy changes.
Localization in Europe to neutralize duties over time, already backed by supplier deals and factory timelines.
Key Risks
EU duties are real now and margins may compress until European production ramps. Policy could tighten further.
Competitive response from EU incumbents and Tesla will remain fierce, with price cuts and model refreshes.
Bottom Line
BYD is among the most resilient Chinese automakers in today’s global market. Its minimal U.S. exposure shields it from high American tariffs, while rapid localization in Europe helps offset EU import duties. Strong vertical integration in LFP batteries through FinDreams and Blade technology keeps costs low and supply chains secure, even as materials and logistics become politicized.
In short, BYD’s resilience comes from controlling its own production, spreading risk across regions, and maintaining efficiency-driven pricing power. For investors seeking China EV exposure with less geopolitical risk, BYD offers a stronger, more balanced position than many peers.
$BYDDF
Bullish outlook
Disclaimer:
All views expressed are my own and are provided solely for informational and educational purposes. This is not investment, legal, tax, or accounting advice, nor a recommendation to buy or sell any security. While I aim for accuracy, I cannot guarantee completeness or timeliness of information. The strategies and securities discussed may not suit every investor; past performance does not predict future results, and all investments carry risk, including loss of principal.
I may hold, or have held, positions in any mentioned securities. Opinions herein are subject to change without notice. This material reflects my personal views and does not represent those of any employer or affiliated organization. Please conduct your own research and consult a licensed professional before making any investment decisions.
One of my biggest holdings. Nice post