Shares in Chinese electric vehicle maker BYD (BYDDY) reversed today, as it set out plans to build a third manufacturing site in Europe to drive more demand.
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European Gears
The Chinese manufacturer is already building a factory in Hungary that should start output at the end of this year, while another one in Turkey is due to start production in 2026, for a total capacity of around 500,000 vehicles a year.
The company’s special adviser Alfredo Altavilla said today that the group will also need to produce batteries in Europe, meaning another site was being considered.
“It does not make sense to invest in car assembly in Europe but bring batteries from China,” he said during an automotive conference in Milan. He added BYD was considering all European countries for further investment and was already talking to local authorities.
BYD has set a target of producing all of its electric vehicles for sale in Europe locally within three years. That will help it avoid EU tariffs on China.
In a similar move, the company is opening manufacturing sites in other countries outside of China such as Brazil.
It has a target to sell half of its vehicles outside the Chinese market by 2030 in response to an increasingly competitive EV market both at home and abroad.
Buffett Response
BYD will be building on an increasingly solid foundation in Europe. In July, BYD outsold rival Tesla (TSLA) on the continent.
New-car registrations for BYD models more than tripled to 9,698 vehicles across the EU in July. In contrast, registrations for Tesla models in the EU contracted more than 42% to 6,600 cars.
As seen below, it is already making strides in expanding its overseas sales:
Altavilla also gave his thoughts on the recent decision by Warren Buffett’s Berkshire Hathaway ($BRK.A) investment group to fully exit BYD, ending a 17-year investment and knocking its share price.
Berkshire disclosed in a March filing that the value of BYD’s holdings had dropped to zero. Since August 2022, Buffett has steadily trimmed Berkshire’s stake in the company, capitalizing on the solid surge in BYD’s share price. By June 2024, Berkshire’s stake had fallen below 5%, exempting the company from publicly disclosing future trades.
Buffett “made a profit of 20 times the capital he invested. He did very well to do what he did,” he said. “We’ve been extremely glad to have had Buffett as an investor, but the fact that he monetised his position is exactly what Berkshire Hathaway does for a living: buying, earning and selling.”
Is BYDDY a Good Stock to Buy Now?
On TipRanks, BYD only has one analyst rating so let’s look at its financial forecasts.
