BYD's stock takes $58b hit amid investor jitters over price war

BYD faces pressure to restore investor confidence after a US$45 billion (S$58 billion) stock selloff, with growing concerns over its ability to fend off competition amid a destructive price war in China.

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The Chinese electric vehicle (EV) maker’s Hong Kong-listed shares have tumbled more than 30 per cent from the all-time high reached just four months ago, underperforming peers. Analyst sell ratings on BYD have surged to the highest level since 2022, Bloomberg-compiled data show.

Investors are losing patience with BYD’s strategy of taking the lead on deep discounts, while the government is clamping down on the so-called involution wreaking havoc on the industry. At the same time, rivals including Geely Automobile Holdings and Zhejiang Leapmotor Technology are gaining ground.

“While I believe investors retain a positive long-term view, there is a real concern around BYD’s aggressive ‘market share gain by pricing pressure’ strategy in the anti-involution context,” said Mr Kevin Net, head of Asian equities at Financiere de L Echi-quier. “In the short term, this should still weigh on both topline and margins.”