Analysts bullish on BYD as it overtakes Tesla, edges out other Chinese EV players

[SINGAPORE] Analysts are getting bullish on BYD as the Chinese automaker’s soaring exports, rising global presence and cost competitiveness signal favourable tailwinds. 

In a May 16 research note, UOB Kay Hian (UOBKH) named BYD as a top buy and assigned it a 510 yuan target price.

Morgan Stanley on Wednesday (May 20) added BYD to its Global Emerging Market and Asia-Pacific ex-Japan Focus lists. Citi in a Wednesday note raised its target price for the counter to 669 yuan, with a “buy” rating.

This comes as the automaker logged a surge in exports for 2025, particularly in Europe, where it outsold Elon Musk’s Tesla in the continent for the first time. BYD registered 7,231 new-battery electric vehicles (EV) in April, a 169 per cent year-on-year surge that launched it into the top 10 brands by EV sales. Tesla moved one spot lower, as its registrations dived 49 per cent.

“We think (BYD’s) valuation is attractive at 18.3 times 2026 estimates for price-to-earnings ratio, with 22 per cent return on equity,” said Morgan Stanley.    

On track for export growth target: Citi

Based on the first four months of 2025, China’s passenger vehicle export pattern has turned “even more favourable towards BYD”, Citi analysts Jeff Chung, Kyle Wu and Betty Li said. 

They pointed out that BYD’s battery EV export market share “accelerated significantly” from 23 per cent in FY2024 to 38 per cent for the first four months of FY2025.  

“From the year-to-date trend for 2025, we expect (that for) 2025/2026, China’s exports of plugin-hybrid vehicles (PHEV) … should grow at 236 per cent/100 per cent year on year,” they said.  

In the first four months, the Chinese automaker’s exports grew across its Europe, Oceania, South-east Asia and Latin America markets; in Europe, exports led growth and surged 385 per cent year on year. 

Given its performance for the four-month period, Citi analysts think BYD is “on track” to hitting its 2025 export volume target of around one million exports, which “remains achievable”. 

“We expect BYD new energy vehicle 2025/2026 sales volumes of 5.75 million/7.2 million units on high-end brand sales growth, much better demand-supply relationship within the PHEV sector, wider average selling price positioning within the battery EV segment penetrating both the lower-end and higher-end segments going forward, and decent export sales growth.”

Rising global presence

With strong April 2025 sales, BYD is rapidly overtaking Tesla in Europe, said UOBKH analysts Ken Lee and Bella Lu. 

The Chinese carmaker outsold Tesla at ratios of 2:1 in Germany and 5:1 in the UK. It has become the top EV brand in Italy, with a 11.5 per cent market share. 

“As Tesla’s European sales slide and BYD expands aggressively, the competitive gap continues to widen,” they said. 

Morgan Stanley similarly highlighted BYD’s “increasing global presence”. 

Beyond overseas competition, the automaker also has advantages over its domestic peers – other Chinese EV players – given its vertically integrated supply chain and growing scale, said Tim Hsiao, auto analyst for China at Morgan Stanley. 

Better tech, lower costs 

BYD models such as Atto 3, Seal and Song Plus DM-i are winning over European buyers with lower costs and superior technology, said UOBKH. Morgan Stanley favours the automaker for its “rapid EV product innovation”.

BYD’s “localised strategy”, with more than 120 stores, a Hungary plant set to open in 2026 and its balanced EV/PHEV lineup, contrasts with Tesla’s premium pricing and limited model range, UOBKH noted.

Likewise, Morgan Stanley’s Hsiao pointed out that the automaker outdoes other Chinese EV players with its cost competitiveness and bargaining power with supply chains.