BYD Weighs Formula 1 Entry Amid Record Exports and Margin Squeeze

The same week BYD reported a record 135,000 vehicles shipped overseas in April, its top brass was huddling in Cannes with former Red Bull team principal Christian Horner over a potential Formula 1 berth in 2026. The juxtaposition captures the Chinese electric-vehicle maker’s current balancing act: breakneck international growth colliding with thinning profits at home.

Talks with F1 chief Stefano Domenicali remain preliminary, with the series’ management citing logistical hurdles. Stella Li, BYD’s executive vice-president, held two days of meetings with Horner on the French Riviera, and has since confirmed initial discussions with Domenicali. FIA President Mohammed Ben Sulayem has thrown his weight behind a Chinese entry, arguing it would strengthen the championship’s long-term commercial stability. The timing is strategic: Formula 1’s next-generation engine regulations, set for 2026, will place a far greater emphasis on electrification, playing directly to BYD’s technological strengths.

That motorsport push comes as soaring oil prices supercharge BYD’s European momentum. Since US and Israeli air strikes on Iran late February triggered a broader conflict, crude has stayed above $100 a barrel. European EV registrations jumped 34% year-on-year in April across 16 markets covering more than 80% of EU and EFTA new-car sales. On Germany’s Carwow platform, purchase inquiries for BYD models surged 25,000% in the first quarter; Philipp Sayler von Amende, managing director of Carwow Deutschland, said the brand had “transformed from a niche player into one of the most in-demand providers.” In the UK, BYD has been the best-selling EV marque since April, overtaking Tesla, Kia and all major European manufacturers.

The export figures underline the shift. April’s 135,000 overseas deliveries were 70% higher than a year earlier and a new monthly record. Cumulative international sales for the first four months of 2026 reached roughly 456,000 units. The company now targets 1.5 million vehicles shipped abroad this year, up from its earlier guidance. In Britain alone, BYD operates 135 locations and recorded more than 21,000 new registrations in the first quarter.

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

Yet China remains the weak link. For the first quarter of 2026, net profit plunged 55% to the equivalent of about $597 million, battered by price wars and margin erosion in the home market. The full-year 2025 picture was also grim: net income fell 19% to 32.62 billion yuan. Heavy investment in European showrooms and sales networks is adding further fixed-cost pressure.

BYD is racing to build local production capacity to sidestep the EU’s 27% import tariff. In Szeged, Hungary, a new plant has already started test production, with full-scale output targeted for 2028. Hungarian authorities are currently investigating possible environmental breaches at the construction site. Meanwhile, a $1 billion factory in Turkey is expected to be operational by the end of 2026. The company is also exploring the purchase of idle European facilities, including former Stellantis plants, to secure regional supply chains.

The luxury sub-brand Denza has launched in five major European markets, among them Germany, France and the UK, and BYD plans to expand into 30 countries by year-end. All this overseas activity, however, comes with a hefty price tag. The Formula 1 project, if confirmed, would add yet another layer of marketing expenditure.

BYD at a turning point? This analysis reveals what investors need to know now.

Goldman Sachs sees the domestic margin trough as a buying opportunity. It rates the stock a Buy with a 12-month price target of 134 Hong Kong dollars, while the consensus of 25 analysts sits at 124 Hong Kong dollars. On 20 May 2026, the shares closed at 90.95 Hong Kong dollars, having lost nearly 40% over the past twelve months.

Whether the oil-price-driven European demand spurt proves structural or cyclical remains an open question. For now, the export engine is firing on all cylinders, but the costs of chasing that growth—and the allure of the F1 grid—will keep investors watching the bottom line.

Ad

BYD Stock: New Analysis - 20 May

Fresh BYD information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated BYD analysis...

en | CNE100000296 | BYD | boerse | 69384210 |