A $60,000 BYD Sealion 7 caught Julian Scot-Smith’s attention at a London Porsche dealership last December. The British couple had come to browse German luxury SUVs in Mayfair. They left considering a Chinese alternative.

That moment, captured in a new Wall Street Journal analysis, distills everything happening in the global auto industry right now. BYD delivered more than one million vehicles outside China in 2025, more than double the previous year’s total. The Shenzhen-based automaker that replaced Tesla as the world’s biggest EV seller isn’t just winning in China anymore. It’s reshaping car markets from Munich to Mexico City.

Here’s what you need to know:

The Fact: China exported 7.1 million vehicles from domestic automakers in 2025, up from 5.9 million the previous year. BYD led the charge with overseas deliveries doubling year-over-year.
The Delta: Chinese brands now control roughly 7% of Western Europe’s total auto market, selling more than 500,000 units in the first three quarters of 2025 alone. That number was effectively zero a decade ago.
The Buyer Impact: European consumers can now cross-shop a $60,000 BYD against a $60,000 Porsche at the same dealership. In Mexico, the $22,000 BYD Dolphin Mini outsells Ford.

BYD’s European dealer network targets 2,000 locations by late 2026

BYD plans to operate 2,000 sales locations across Europe by the end of 2026, up from just 284 at the end of 2024. The company raised $5.6 billion from shareholders last March to fund this expansion, which includes new factories in Hungary, Turkey, and Indonesia, with a third European plant likely in Western Europe. This aggressive retail buildout positions BYD to compete directly with established European brands on their home turf.

The strategy is working. When the Blackburn family from Yorkshire, England, needed new vehicles last October, they sold their BMW and Fiat and bought two BYDs instead: a Sealion 7 and a smaller Atto 2. Adrian Blackburn liked the value proposition so much he purchased $2,500 worth of BYD stock. “I see it as a very credible brand,” he told the Journal.

The family tested their Sealion 7 with an 850-mile round trip to a French campsite. Charging along the way cost roughly $155. Try that math with a comparable German SUV.

Chinese carmakers outnumbered local automakers at the Munich auto show last September. Geely announced plans to ship 200,000 vehicles from its core Chinese brands to Europe by 2027, up from approximately 11,000 in the first three quarters of last year. The invasion has arrived.

Tariffs aren’t stopping Chinese EVs, just redirecting them

Chinese vehicles face steep import duties nearly everywhere. The EU imposed tariffs of up to 27% specifically on BYD EVs. The U.S. maintains a 100% tariff that effectively blocks direct imports. Mexico recently increased duties to 50% on Chinese-made vehicles.

Politics, not market forces, is the biggest obstacle to China’s automakers. Yet every tariff wall has a workaround.

Canada cut tariffs last week following a meeting between Prime Minister Mark Carney and Chinese leader Xi Jinping. Some 49,000 vehicles will now qualify for Canada’s most-favored-nation rate of 6.1%, down from the previous 100% duty that matched U.S. policy. The agreement includes provisions for Chinese investment in Canadian auto production.

BYD’s response to tariffs has been to build locally. The company already operates factories in Thailand and Brazil. Plants in Hungary and Turkey are scheduled to begin production this year. A third European facility is in development. By manufacturing inside tariff walls, BYD transforms from a Chinese importer into a local employer that European politicians find much harder to restrict.

“BYD wants to become one of the most relevant players in Europe, and in a very short period,” said Alfredo Altavilla, a veteran industry executive advising the company.

Mexico becomes BYD’s backdoor to North America

Mexico is one of China’s top foreign auto markets, accounting for roughly a quarter of the estimated 1.6 million Chinese vehicles sold there in 2025. BYD sold between 75,000 and 80,000 units in Mexico last year, more than Ford or Honda, with nearly 100 dealerships nationwide.

The vehicles resonate with Mexican buyers for straightforward reasons: they’re affordable and well-equipped. The $22,000 BYD Dolphin Mini features racing-style seats, a wireless phone charger, and a large dashboard screen. Enrique Estévez, an Uber driver from Mexico City’s working-class Nezahualcóyotl suburb, sold his Toyota Yaris for one. “A $15 battery charge lasts almost two days,” he said, about a third the cost of a full tank of gasoline.

On the higher end, the BYD Shark plug-in hybrid pickup starts around $51,000 in Mexico. The truck combines a turbocharged engine with dual electric motors for more than 500 miles of range. YouTube reviewers from TFL Studios have logged nearly three million views on videos featuring the Shark, calling it “forbidden fruit” for American buyers who can’t legally purchase one.

“I can’t imagine what people would say in a blind testing with BYD models,” said Ramón Solís of Grupo Surman, which runs BYD dealerships in Mexico. “U.S. consumers will soon start seeing what they are missing.”

One Mexico City showroom now displays BYD models in a space once reserved for Fords.

China’s overcapacity problem fuels the export surge

China has factories capable of manufacturing more than 46 million vehicles annually. Annual sales will likely fall short of 30 million, according to S&P Global. That 16-million-unit gap explains the export urgency. Companies that can’t sell domestically must find foreign buyers or face collapse.

“You need to go global,” said Klaus Zyciora, a former Volkswagen designer now heading design at state-owned automaker Changan. “Toyota did it. Ford did it. GM did it. If you are not a manufacturer that is able to bring five million units annually to the market, you will have a hard time.”

BYD itself missed expectations in 2025. The company sold 4.6 million cars globally, short of the 5.5 million it had targeted. More concerning: Q3 2025 net income dropped 32.6% as the domestic price war crushed margins. The intense competition in China’s market drove Berkshire Hathaway Chairman Warren Buffett to fully exit his company’s BYD stake by September 2025. When the world’s most famous value investor walks away entirely, it suggests the current growth may be too capital-intensive to sustain.

Rapid overseas growth, where margins run higher than in the cutthroat Chinese market, has helped cushion the domestic pressure. Exports have become a survival mechanism, not just a growth strategy.

European automakers watch their profits evaporate

Volkswagen, which once counted China for more than half of its global profit, has already had its lunch eaten by local brands there. Now China is coming for VW’s home turf.

“They will learn to upgrade, and then they will come in there as well,” Volvo Cars CEO Håkan Samuelsson warned about premium Chinese vehicles entering European markets.

Upmarket brands have particular cause for concern. Chinese premium EVs offer comparable technology to German luxury sedans at dramatically lower prices. The BYD Seal competes directly with Porsche’s Taycan at roughly one-third the cost. When technology parity meets price disparity, heritage badges lose their power.

BYD’s approach to Europe has evolved rapidly. When vehicles first arrived, some carried sticker prices north of $80,000, and early sales disappointed. Stella Li, BYD’s international boss, removed the Europe chief after just six months. “We don’t wait for one quarter, six months, one year to adjust our strategy,” she said.

The company brought in Alfredo Altavilla, who previously led Fiat Chrysler’s European operations, to rebuild the strategy. “I told Stella what was my experience in running a car business in Europe, that European consumers are very different from Chinese ones,” he recalled. Local hires followed. Altavilla estimates that 90% of BYD’s European staff are now Europeans, with at least a dozen senior executives joining from Fiat Chrysler’s successor Stellantis.

The product lineup changed too. BYD added smaller cars, which Europeans typically buy, along with plug-in hybrids for consumers still wary of going fully electric. Hybrids, which face lower tariffs than pure EVs, now account for nearly half of BYD’s sales in Western Europe.

“If we focus our strategy on EVs only, we will become another Tesla, with all the bumps, the ups and downs,” Altavilla said, “selling a lot in Norway, Denmark and Sweden and selling nothing in Southern Europe.”

EVXL’s Take

The Wall Street Journal’s comprehensive look at BYD’s global push confirms everything we’ve been tracking for the past two years. When we first covered BYD’s expansion defying U.S. tech barriers in October 2024, the company was already demonstrating that tariff walls create detours, not dead ends. Last November, we reported on BYD’s 2,000-dealer European expansion, calling it a “multi-year geopolitical chess move.” Today’s WSJ data validates that analysis.

But here’s what the triumphant export numbers obscure: BYD is partially dumping inventory it can’t sell profitably at home. That 32.6% Q3 profit collapse tells you the domestic price war is brutal. China’s 16-million-unit production surplus isn’t just motivation for exports. It’s a ticking time bomb. If Western markets tighten regulations further, BYD will be stuck with massive underutilized factories and high debt loads from the $5.6 billion expansion.

The Mexico angle deserves particular attention. As we documented in our December coverage of China’s 2,367% export surge to Mexico, Chinese automakers are stockpiling inventory just south of the U.S. border while the regulatory picture develops. BYD’s 75,000-80,000 Mexican sales now exceeding Ford and Honda should alarm Detroit.

The European dynamics mirror patterns we’ve tracked since BYD first surpassed Tesla in European sales last April. While Tesla’s aging Model 3 and Model Y lineup struggles against fresher competition, BYD keeps iterating. The German automakers we profiled in our existential crisis coverage haven’t found answers. Volkswagen just opened a $2.9 billion China lab because its German engineering couldn’t keep pace.

One risk the export cheerleaders ignore: BYD’s cost advantage evaporates when you build in Europe. The vertical integration and cheap energy that make Shenzhen manufacturing profitable don’t translate to Euro-zone wages, strict battery recycling mandates, and European labor unions. The Hungarian and Turkish factories solve the tariff problem while creating a margin problem.

Buffett’s complete exit by September 2025 wasn’t a trim. It was a verdict. The world’s most patient investor decided BYD’s peak valuation was behind it. That doesn’t mean BYD will fail. It means the easy money has been made, and what comes next requires execution, not just expansion.

My prediction: By mid-2026, BYD will be selling more vehicles in Europe than at least one legacy German brand. But watch the margins, not just the volume. If European manufacturing costs squeeze profitability while Chinese domestic competition grinds on, BYD’s “invasion” could turn into an expensive occupation. The question isn’t whether Chinese EVs will reshape global auto markets. It’s whether reshaping them will actually make money.

Editorial Note: This article was researched and drafted with the assistance of AI to ensure technical accuracy and archive retrieval. All insights, industry analysis, and perspectives were provided exclusively by Haye Kesteloo and our other EVXL authors, editors, and YouTube partners to ensure the “Human-First” perspective our readers expect.