Sales of BYD electric vehicles keep hitting fresh records, even surpassing Tesla as the world’s biggest maker in the last quarter. Yet shares of the Chinese EV maker keep falling. Has BYD already peaked?

BYD, China’s best-selling EV brand, has continued to grow sales volume and market share, selling about 1.6mn battery EVs last year. Exports set another record, more than quadrupling last year and selling to over 70 countries.

But its Shenzhen-listed shares are down 45 per cent from its 2022 peak, pushing valuations down to over a decade low. At just 15 times forward earnings, its shares trade at just a fraction of its over 170 times multiple in 2021 and at a steep discount to peers including Tesla. This marks a big shift from the foreign investor frenzy in Chinese EV stocks in 2020, when buying shares of BYD had offered comparable returns to those of Tesla.