BYD (002594.SZ) Hot Stock Analysis: Ford Battery Partnership and Sales Milestones Drive Market Attention

January 20, 2026 | 2026-01-20 18:55:26 (UTC+8)

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BYD (002594.SZ) made it to the hot list today, with market attention rising significantly, driven primarily by the major catalyst of Ford entering negotiations with BYD on battery supply cooperation [1][2][3]. This news marks the first time BYD’s battery technology has received substantive recognition from an international legacy automaker, while being paired with positive factors such as surpassing Tesla in electric vehicle sales in 2025 and inclusion in the Hang Seng Tech Index. Despite facing short-term challenges such as price war pressure and aging product lines, BYD still warrants investors’ attention supported by strong overseas export growth, attractive valuation, and upcoming new model launches [0][4].

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According to the latest report from The Wall Street Journal, U.S. automotive giant Ford Motor is in negotiations with BYD on battery supply cooperation for hybrid models [1]. This news is a milestone for BYD:

First, this is the first time BYD’s battery technology has received substantive recognition from an international legacy automaker. Previously, BYD’s battery business mainly supplied enterprises such as Xiaomi, XPeng, and Toyota [4], and Ford’s partnership intention indicates that its battery technology has achieved international competitiveness. Bernstein analysts pointed out that if Ford reaches a cooperation agreement, it will significantly enhance BYD’s position in the global supply chain, and the share of external battery sales is expected to rise from 10% to mid-double digits in 2025 [4].

Second, the external battery business itself shows strong growth momentum. Data shows that BYD’s external battery shipments nearly tripled in 2024, and energy storage battery shipments also doubled [4]. This indicates that BYD is transforming from a pure automaker to a comprehensive new energy solutions provider, and the battery business is expected to become a new profit growth driver.

BYD’s pure electric vehicle sales reached approximately 2.26 million units in 2025, surpassing Tesla (TSLA) for the first time [5]. This milestone marks a major shift in the global electric vehicle market pattern, with Chinese manufacturers officially taking a leading position on the global stage.

The overseas market performance is particularly outstanding. BYD’s export growth is remarkable, with its pure electric vehicle export market share soaring from 23% in FY2024 to 38% in the first four months of 2025 [6]. Goldman Sachs forecasts that BYD’s overseas sales could reach 900,000-1,000,000 units in 2025 [6], which means the international business will become a new growth engine for the company. Overseas expansion can not only diversify domestic market risks but also enhance the brand’s global influence, providing support for valuation re-rating.

The quarterly review results from the Hang Seng Index Company have included BYD Company Limited (Hong Kong stock code: 1211.HK) in the Hang Seng Tech Index [6], which is expected to attract approximately $2 billion in passive capital inflow over a period of about 2.7 days. This index adjustment reflects the capital market’s recognition of BYD’s technological attributes, while also bringing incremental capital support to both the Hong Kong and A-share markets.

Against this backdrop, Bernstein analysts reaffirmed BYD’s “Outperform” rating, with the target price implying an upside of approximately 30% [4]. Data from Investing.com shows that the current average analyst target price is RMB 128.06, implying an upside of 33.59% [8].

From a technical perspective, BYD’s current stock price is RMB 94.74, with an intraday decline of 1.51%, approaching the 52-week low of RMB 91.50 [0]. The recent price has shown a range-bound trend, with a 20-day trading range of 94.05-101.45 RMB, and a volatility rate of approximately 1.61% [0].

In terms of trading volume, 38.91 million shares were traded today, slightly higher than the 3-month average trading volume of 35.94 million shares, with a volume ratio of 1.09 times [0]. This indicates that market attention is rising, but there has been no abnormal volume surge, and the trend is relatively orderly. The open interest in the options market reached a record nearly 600,000 contracts, approximately three times the level in June [7], showing that investors’ attention to BYD’s volatility has increased significantly.

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The driving factors behind this hot event show obvious cross-domain correlation characteristics. The Ford battery partnership negotiations are not just a single cooperation news, but represent the trend of global automotive industry value chain restructuring. Legacy automakers choosing BYD’s batteries is essentially a recognition of China’s new energy technology strength, which will generate a demonstration effect and may attract more international automakers to seek cooperation.

At the same time, events such as BYD surpassing Tesla in sales, the sharp increase in export share, and inclusion in the Hang Seng Tech Index reinforce each other, all pointing to the long-term improvement of the company’s fundamentals. The positive cycle formed by these overlapping factors is expected to drive the market to re-examine BYD’s valuation logic — a valuation shift from a traditional automaker to an integrated tech and new energy enterprise.

BYD is undergoing a transformation from an “efficient electric vehicle manufacturer” to a “technology leader”. It plans to launch at least 10 new models in 2026, which will adopt a brand-new exterior design, be equipped with the advanced intelligent driving assistance system “Sky Eyes”, and upgrade battery technology to extend the cruising range of plug-in hybrid models [9]. This product cycle will effectively address the current issue of aging product lines and inject new momentum into the company.

Vertical integration capability remains BYD’s core competitive advantage. The company independently develops core technologies for batteries, motors, and electronic controls, with full industry chain capabilities from raw materials to complete vehicles. This model has significant advantages in cost control and supply chain security. With the increase in intelligent penetration rate, BYD is expected to establish new competitive barriers in the intelligent driving track.

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Price wars in the Chinese automotive market are intensifying, and BYD’s profit margins are under continuous pressure. The company’s profit plummeted 30% in the second quarter of 2025, marking the first decline in more than three years [7]. The 2026 delivery target has been lowered from 5.5 million units to 4.6 million units [7], reflecting the management’s cautious expectations of the market environment.

The current product cycle is coming to an end, and buyers are shifting to competitors such as Geely and Leapmotor [7]. Analyst sell ratings have risen to the highest level since 2022 [7], and there is divergence in the market regarding BYD’s short-term prospects.

China’s “anti-cutthroat competition” policies may restrict automakers’ aggressive pricing strategies, which poses a potential constraint on BYD, which relies on price advantages to seize market share.

The current stock price is below the 20-day moving average (96.95 RMB). If it breaks below the 52-week low of 91.50 RMB, it may open up further downside space [0].

If the Ford battery negotiations reach a substantive agreement, it will significantly enhance BYD’s position in the global supply chain, which may become a trigger for valuation re-rating.

Multiple new models will be launched in the first quarter of 2026, which are expected to serve as short-term stock price catalysts [9]. New products are expected to improve the product mix and increase per-unit profit margins.

Better-than-expected export growth and continuous overseas expansion will effectively diversify domestic market risks and enhance the company’s anti-cyclical capabilities.

The current price-to-earnings ratio is approximately 17 times, lower than the three-year average of 20 times [7], providing a relatively safe price boundary for medium-to-long-term investors.

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BYD’s appearance on the hot list is the result of multiple positive factors. The battery supply partnership negotiations between Ford and BYD are the core catalyst, marking the recognition of China’s battery technology strength by international legacy automakers [1][2][3]. Coupled with positive factors such as surpassing Tesla in electric vehicle sales in 2025 and inclusion in the Hang Seng Tech Index, market attention to BYD has increased significantly.

From a fundamental perspective, BYD is supported by strong overseas export growth, attractive valuation, and upcoming new model launches in 2026, which provide support for its stock price. However, it faces short-term challenges such as price wars, declining profit margins, and aging product lines, and investors need to remain cautious.

Technically, the stock price is near the key support level of 91.50 RMB, with the 20-day moving average forming short-term resistance. If it can stabilize above 97 RMB and break through the resistance level of 101 RMB, the short-term technical pattern is expected to turn stronger [0]. The record open interest in the options market indicates rising expectations of market volatility, and investors should closely monitor subsequent trends.

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Price Type	Price Range	Importance
Key Support Level	91.50-93 RMB	52-week low and psychological support range
Short-term Resistance Level	96.95-101.45 RMB	20-day moving average and range top
Medium-term Resistance Level	105-108 RMB	Important resistance zone
Target Price	Around 128 RMB	Average analyst target price

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This report provides information collection, analysis, and market background to support decision-making, aiming to objectively present factual information, market context, and risk identification. It does not provide prescriptive advice on buying, selling, or holding securities. Investors should make independent judgments and bear corresponding risks.