South Korea Cuts BYD Out of EV Subsidies as Profit Collapses and Blade Battery Snag Weigh on Shares

The chasm between BYD’s technological ambition and its stock market performance has rarely been wider. While the Chinese electric-vehicle giant pushes into new markets and rolls out cost-saving autonomy chips, its shares have slumped to within a hair’s breadth of a 52-week low — and a fresh blow from South Korea threatens to deepen the pain.

Seoul’s Ministry of Climate, Energy and Environment has published the final list of manufacturers eligible for state purchase subsidies. A total of 27 producers and importers made the cut. BYD did not. The company was the only registered importer on the official vehicle list to fail to qualify, meaning that from 1 July 2026 all BYD passenger cars sold in South Korea will lose access to government incentives. In a market where subsidies often tip the scales for buyers, the exclusion effectively raises the price of entry for Korean consumers eyeing a BYD model.

The Korean setback comes at a delicate moment for the Shenzhen-based manufacturer. First-quarter 2026 net profit crashed 55% from a year earlier to 4.08 billion yuan, underscoring the severity of the margin squeeze gripping the sector. To combat cost pressure, BYD has turned to external hardware. The company is testing the “Horizon Super Drive” advanced driver-assistance system from supplier Horizon Robotics in its Seal sedan — a move that cuts production costs by 1,500 to 4,000 yuan per vehicle. Chairman Wang Chuanfu personally inspected the system. Over the longer term, BYD plans to introduce its own Xuanji A3 architecture in the more expensive Denza models from 2027, but for now it relies on third-party chips. Nvidia dominates that market with nearly 51% share, while Horizon Robotics is the main challenger.

Should investors sell immediately? Or is it worth buying BYD?

Yet even as the cost-saving technology progresses, production bottlenecks are adding to the strain. Vice Chairman He Zhiqi confirmed that output of the Seal 08 is being held back by shortages of the new “Blade Battery 2.0”. The factory in Xixian is working to resolve the logjam. Wang Chuanfu described the situation as unusual, noting that the pressure is not from weak demand but from demand that is too strong — a painful irony for a company whose stock is languishing.

BYD has not given up on the Korean market, however. At the Busan International Mobility Show, it launched a strategic countermove by introducing its first plug-in hybrid model in the country: the Sealion 6 DM-i. Until now, BYD had only sold pure battery-electric vehicles in Korea. The PHEV, built on the company’s “Electric-First” platform — which has racked up more than 8 million global sales — is designed to appeal to buyers deterred by range anxiety or patchy charging infrastructure. The hybrid push could help maintain momentum even after the subsidy axe falls, but it remains a tough sell against well-entrenched local and import rivals.

The stock itself is showing classic signs of deep distress. At its last close of €8.22, the shares are just 1.7% above the 52-week trough of €8.08. The year-to-date decline stands at roughly 25%, while the one-year loss has widened to about 39%. The relative strength index has fallen to 19.9, a level that signals a massively oversold market. But technical indicators alone rarely provide a floor when fundamentals are deteriorating. With profit margins under siege, a key subsidy market closing its doors, and a battery production snag still unresolved, the next real test for BYD may come from concrete results — official launch dates for the Horizon Super Drive system and clear evidence that the promised cost savings are flowing through to the bottom line. Until then, every attempt at a rebound is likely to hit a ceiling.

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