BYDâs Chip Headache Pushes Up the Cost of âGodâs Eyeâ as Export Growth Offers a Glimmer of Relief
Published on 04/30/2026 at 13:50 | Redaktion boerse-global.de
The Chinese electric vehicle giant BYD finds itself caught between two powerful forces: a brutal price war at home that has savaged its first-quarter earnings, and a global shortage of memory chips that is now forcing it to raise prices on a key technology just as it tries to win over cost-conscious buyers.
From May 1, the price of BYDâs âGodâs Eye Bâ driver-assistance system will jump by roughly 20%, to 12,000 yuan. The culprit lies deep inside the hardware. The artificial intelligence boom has sucked up vast supplies of memory chips, with new models like DeepSeek diverting production capacity toward data centers. Standard DRAM chips nearly doubled in price during the first quarter, while specialized automotive memory has soared even higher, according to TrendForce.
The timing could hardly be worse. BYDâs first-quarter net profit collapsed by 55% to 4.08 billion yuan, while revenue shrank by nearly 12% to 150.2 billion yuan. The domestic price war shows no sign of easing, and the companyâs short-term liabilities ballooned by 72% in just three months, reaching 66.3 billion yuan. Beijingâs crackdown on late payments to suppliers has added further strain, forcing BYD to settle its bills far more quickly than before.
Yet even after the increase, BYDâs pricing remains relatively competitive. Rival XPeng charges 20,000 yuan for its top-tier system, while Tesla asks 64,000 yuan for its Full Self-Driving package in China. The question is whether BYD can absorb the chip costs without losing customers in a market where every yuan matters.
Should investors sell immediately? Or is it worth buying BYD?
Overseas, the picture looks brighter. BYD exported 321,165 vehicles in the first quarter, a jump of nearly 56% from a year earlier. Exports now account for almost half of all deliveries. Higher oil prices abroad are driving demand for electric vehicles, and the company aims to ship 1.5 million vehicles globally in 2026.
To sidestep European tariffs of 27%, BYD is ramping up local production. Trial operations began in January at its new plant in Szeged, Hungary, with full-scale manufacturing due to start in the current quarter. A second European factory in Turkey is slated to follow later this year. In Brazil, the company is adding a third shift at its Camaçari facility, hiring more than 1,600 workers to keep production running around the clock from July.
But the global push is not without setbacks. Plans for a plant in Tanjung Malim, Malaysia, have stalled after the government demanded a minimum selling price of 100,000 ringgit and an export quota of 80% for locally built cars. BYD is now focusing on projects in Thailand and Indonesia to spread its operational risk across Southeast Asia.
BYD at a turning point? This analysis reveals what investors need to know now.
TrendForce analysts expect memory chip prices to remain elevated well into the summer. For BYD, that means the margin squeeze is far from over. The company must navigate higher input costs, a punishing domestic market, and rising protectionist barriers abroad â all while keeping its growth story on track.
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