BYD shares hit record high, trouncing Tesla’s stock this year

BYD shares briefly rose to their highest intraday price on record, reflecting optimism that the Chinese electric vehicle (EV) leader will further challenge peers such as Tesla through its smart-driving strategy.

The automaker’s Hong Kong-listed stock jumped as much as 4.5 per cent to an all-time high earlier on Tuesday (Feb 11) after the company unveiled plans to enable advanced driver-assistance features in almost all future models at no additional cost.

It later erased gains, taking a breather following three sessions of advances that pushed it into overbought territory. The shares have climbed more than 20 per cent this year, while Tesla’s have sank 13 per cent.

BYD will integrate AI startup Deepseek’s software into its cars, following domestic peers such as Geely, Great Wall Motors and Leapmotor.

BYD is Tesla’s biggest rival in China and increasingly abroad, and Monday evening’s announcement led analysts to suggest a new price war might be on the horizon.

BYD will install its “God’s Eye” autonomous driving system in at least 21 models, including the Seagull budget hatchback priced from 69,800 yuan (S$12,950).

Analysts expect the move to further intensify competition in China’s EV market, already the world’s largest and where the Shenzhen-based firm is a leader.

“BYD is essentially providing a cost efficient solution, and accelerating the commoditization of basic self driving technology,” said Faye Gao, Asian equities portfolio manager at Lombard Odier Investment Managers. “It is a new front in the price war as BYD is adding these features with almost the same price.”

Some shares connected to other Chinese EV firms slid on Tuesday. Xpeng tumbled more than 8 per cent.

BYD aims to deliver five million to six million EVs and hybrids this year, up from 4.27 million in 2024. The company finished the year as the seventh-biggest car group by sales globally, data compiled by Bloomberg shows.

It fell short of surpassing Tesla as the biggest seller of pure EVs globally last year by less than 25,000 units. However, BYD is set to leapfrog the Elon Musk-run company in annual revenue, on track to exceed US$100 billion in sales for the first time in 2024.

Despite this year’s rally, BYD’s stock has retained a significant valuation discount to Tesla’s. The Chinese automaker’s shares currently trade at about 18 times forward multiples, below their five-year average and less than a fifth of Tesla’s. BLOOMBERG, AFP