BYD’s Global Strategy: A Calculated Shift Beyond China’s Borders

Facing intense domestic competition and market saturation, China's leading electric vehicle manufacturer, BYD, is accelerating its international growth strategy. The company's focus has decisively shifted toward overseas markets as a primary engine for future growth and margin protection. This strategic pivot raises questions about its ability to navigate complex geopolitical landscapes while achieving ambitious export targets.

The urgency behind BYD's global push is fundamentally tied to profitability. While the company maintains a dominant position in China, fierce price wars within the domestic market continue to pressure earnings. International markets often allow for higher price realizations, making them crucial for safeguarding margins. This financial reality is driving the aggressive export agenda.

The data underscores this strategic transition. In 2025, exports accounted for 23% of BYD's total sales volume of 4.6 million vehicles. This represents a significant leap from just 10% in 2024, highlighting the rapid scaling of its overseas operations. Management has set a clear target for the current year: to sell 1.3 million vehicles outside of mainland China. Achieving this would mark an approximate 24% increase over the 1.04 million units exported the previous year.

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

Establishing Regional Manufacturing Hubs

To support its export goals and mitigate risks, BYD is actively diversifying its production footprint across Asia, moving beyond its concentrated manufacturing base in China.

• Vietnam Investment: On January 27, the company formalized a cooperation agreement with Kim Long Motor. The plan involves constructing a $130 million battery production facility for commercial electric vehicles in central Vietnam. The plant is designed to be built in two phases, ultimately reaching a capacity of 6 GWh.
• Adapting to the Indian Market: BYD is modifying its approach for India's fast-growing EV sector. After plans for a full-scale factory were declined, the automaker is now evaluating the local assembly of semi-knocked-down (SKD) vehicle kits. This strategy is intended to circumvent stringent import regulations and better serve local demand.

New Models to Drive Global Market Share

The expansion is not solely about volume; it is also a platform for launching higher-margin vehicles. Upcoming models, such as the flagship Tang 9 SUV, are pivotal to BYD's strategy for gaining market share abroad and solidifying its global brand presence. Success in these segments is key to moving beyond competitive, mass-market pricing.

The effective execution of these international projects—specifically, ramping up production in Vietnam and efficiently penetrating the Indian market through localized assembly—will be critical in the coming quarters. If successful, these initiatives will substantially reduce BYD's reliance on its home market. For investors, the operational progress on these fronts will be a primary indicator influencing the stock's trajectory.