BYD's Horizon Super Drive Chip Promises Big Savings, But 55% Profit Collapse and 25% Stock Rout Tell a Different Story
30.06.2026 - 05:04:29 | boerse-global.de
The Chinese electric-vehicle maker is struggling to translate operational momentum into shareholder returns. BYD delivered more than 135,000 vehicles in Europe in the first five months of the year — more than double the year-ago period — and saw monthly registrations in May jump 136% to 32,300, overtaking rival MG. Yet its stock has fallen nearly 25% since the start of 2025, closing at €8.22 on Monday, barely two percent above a 52-week low of €8.08.
The source of investor anxiety lies in the income statement. Net profit in the first quarter of 2026 tumbled 55% to 4.08 billion yuan, forcing management to accelerate cost reduction. Global sales, meanwhile, dropped 20% in the January-to-May period to roughly 1.4 million units, as a sluggish home market in China weighed on overall volume.
BYD is fighting back with technology. The company is currently testing a driver-assistance system called Horizon Super Drive in its Seal sedan. Chairman Wang Chuanfu personally inspected the software, which uses processors from supplier Horizon Robotics rather than in-house chips. The approach slashes production costs per vehicle by between 1,500 yuan and 4,000 yuan — a critical lever in an industry consuming itself with price wars.
Should investors sell immediately? Or is it worth buying BYD?
Longer term, BYD plans to introduce its own architecture, the Xuanji A3, starting in 2027 on higher-end Denza models. But for now, its reliance on external hardware mirrors the broader Chinese market, where Nvidia commands about 51% of the autonomy-chip market and Horizon Robotics is the main challenger.
Investors, however, have yet to reward the promising tech story. The stock’s relative strength index (RSI) stands at 19.9, deep in oversold territory, and the shares trade 24% below their 200-day moving average. The sell-off reflects anxiety that expanding margins in Europe cannot offset the drag from China and the broader profit squeeze.
The coming weeks will be decisive. Management needs to provide firm launch dates for Horizon Super Drive and, more importantly, demonstrate that the cost savings will start showing up in the earnings reports. Until then, the European success story remains a minor consolation for shareholders watching the share price hover near a 12-month nadir.
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