We believe that in order to be positioned for the future, investors should have at least some exposure to the electric vehicle (EV) sector in their portfolios. In our view, one of the most compelling ways to gain this exposure is through BYD.
BYD is one of the largest EV manufacturers in the world and the clear leader in China’s electric vehicle market. China has heavily supported the EV industry through subsidies, infrastructure investment, and policy incentives, which has accelerated adoption and intensified competition among domestic manufacturers.
The Chinese EV market is currently undergoing a consolidation phase driven by aggressive price competition, often referred to as the EV price war. With dozens of manufacturers competing for market share, weaker players are increasingly pressured on margins and profitability. We believe this environment ultimately favors large, vertically integrated companies with strong scale advantages, such as BYD.
BYD’s vertically integrated model, including its in-house battery production, semiconductor capabilities, and vehicle manufacturing, gives the company a meaningful cost advantage relative to many competitors. As the price war matures and weaker firms exit the market, BYD is well positioned to capture additional market share and emerge as one of the long-term winners of the consolidation cycle.
There are also signs that the most aggressive phase of the price war may be approaching exhaustion, as margin pressure across the industry becomes increasingly unsustainable. As market conditions stabilize, companies with strong balance sheets and scale could see a significant recovery in profitability and investor sentiment.
From a technical perspective, BYD also appears to be approaching an important inflection point. In early 2024, the stock reached a major confluence of support levels, which helped stabilize the price following a prolonged decline. Later, the stock broke above a long-term downtrend resistance, signaling potential momentum shift. However, in early 2025, the rally was rejected at a higher resistance level (marked in blue) amid renewed concerns around the intensifying EV price war.
The stock has now returned to another significant confluence of support, which historically has acted as a strong demand zone. If industry conditions begin to normalize and sentiment toward the EV sector improves, BYD could be well positioned for a meaningful rebound from these levels.
BYD is one of the largest EV manufacturers in the world and the clear leader in China’s electric vehicle market. China has heavily supported the EV industry through subsidies, infrastructure investment, and policy incentives, which has accelerated adoption and intensified competition among domestic manufacturers.
The Chinese EV market is currently undergoing a consolidation phase driven by aggressive price competition, often referred to as the EV price war. With dozens of manufacturers competing for market share, weaker players are increasingly pressured on margins and profitability. We believe this environment ultimately favors large, vertically integrated companies with strong scale advantages, such as BYD.
BYD’s vertically integrated model, including its in-house battery production, semiconductor capabilities, and vehicle manufacturing, gives the company a meaningful cost advantage relative to many competitors. As the price war matures and weaker firms exit the market, BYD is well positioned to capture additional market share and emerge as one of the long-term winners of the consolidation cycle.
There are also signs that the most aggressive phase of the price war may be approaching exhaustion, as margin pressure across the industry becomes increasingly unsustainable. As market conditions stabilize, companies with strong balance sheets and scale could see a significant recovery in profitability and investor sentiment.
From a technical perspective, BYD also appears to be approaching an important inflection point. In early 2024, the stock reached a major confluence of support levels, which helped stabilize the price following a prolonged decline. Later, the stock broke above a long-term downtrend resistance, signaling potential momentum shift. However, in early 2025, the rally was rejected at a higher resistance level (marked in blue) amid renewed concerns around the intensifying EV price war.
The stock has now returned to another significant confluence of support, which historically has acted as a strong demand zone. If industry conditions begin to normalize and sentiment toward the EV sector improves, BYD could be well positioned for a meaningful rebound from these levels.
Vassilis Kairaktidis
Initium Asset Management
Initium Asset Management
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Vassilis Kairaktidis
Initium Asset Management
Initium Asset Management
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.