BYD says demand is double its capacity, but its sales data tells a different story

TL;DRBYD predicts China will reach 80% EV penetration as gas car sales plunge 39%, but faces the Pentagon’s 1260H list and Hungary labour scrutiny.

BYD’s executive vice president Stella Li told CNBC on Monday that China’s EV market will push to close to 80% penetration, a bullish forecast that contrasts sharply with rival Nio, whose chief executive William Li said last month that the industry’s “golden era” was over. The prediction arrives on the same day the Pentagon added BYD to its 1260H list of Chinese military-affiliated companies, a designation that prohibits the Department of Defense from contracting directly with listed entities starting 30 June and from procuring their products through third parties a year later.

The penetration rate for hybrid and battery-only vehicles in China has already reached record levels. New energy vehicles accounted for 62.9% of new passenger car sales in May, according to the Chinese Passenger Car Association, up from roughly half in 2024. Sales of petrol-powered cars plunged 39% year on year in the same month, with the CPCA citing higher oil prices driven by ongoing hostilities in the Middle East as a key factor in the collapse.

The US electric car penetration rate remains at roughly 10%, according to the International Energy Agency’s Global EV Outlook published in May, while the global figure sits at approximately 25%. The gap between China and the rest of the world is widening. US tariffs of 100% on Chinese-made electric cars have restricted local sales, and the IEA noted that with the end of EV tax credits, there is expected to be “virtually no government financial support for the purchase of electric cars” in the United States in 2026.