Hong Kong's Hang Seng Index Ends Lower; BYD Slides on Soft January Sales — Market Talk

Hong Kong's benchmark Hang Seng Index closed 2.2% lower at 26775.57 on Monday amid a wider market sell-off. The biggest drag came from automaker BYD, which slid 6.9%, its steepest daily drop in eight months, after releasing January sales figures. Analysts expect China's auto sector to face a tough 2026. Higher effective purchase taxes on electric vehicles and tighter policy conditions are likely to drive a clear downtrend for EV makers, Nomura analysts say. Telecommunication also weighed on the index. China Unicom and China Telecom fell 6.3% and 5.0%, respectively. Data from China's Ministry of Industry and Information Technology showed slowing revenue growth in the telecom sector, prompting listed operators to focus on cutting operating costs, Morningstar says. (megan.cheah@wsj.com)

By Mauro Orru

Tesla closed the year with lower sales in Europe as Chinese auto giant BYD continued to outpace Elon Musk's electric-vehicle maker.

New-car registrations for Tesla models, a reflection of sales, slumped 20% on year to 35,280 units in December across the European Union, the U.K., Iceland, Liechtenstein, Norway and Switzerland, according to the European Automobile Manufacturers' Association, an industry body also known as ACEA. On an annual basis, Tesla sales contracted 27% to 238,656 units.

In contrast, registrations for China's BYD more than tripled to 27,678 units last month and to 187,657 for the whole year, according to ACEA data. While BYD still sold fewer vehicles in Europe than Tesla, the figures show how the fortunes of two key EV makers are diverging.

BYD has experienced a meteoric rise in the continent thanks to its relatively cheap lineup of electric and hybrid vehicles, creating stiff competition for both well-established domestic carmakers such as Volkswagen as well as foreign rivals like Tesla.

Meanwhile, Tesla has had to contend with the fallout from Musk's involvement with the Trump administration that came to an end a few months ago, weighing on buyer sentiment. Tesla sales gloablly fell 9% in 2025 and 16% for the fourth quarter compared with a year prior. The company lost its crown as the world's leading EV maker to the Chinese company BYD.

Earlier this month, Musk said Tesla would stop selling a suite of advanced driver-assistance features for a one-time payment after Feb. 14, switching instead to a monthly subscription service.

Tesla has been offering its Full Self-Driving system for a one-time payment of $8,000 or a subscription of $99 a month in the U.S. The announcement came as the group is looking to grow its recurring subscription revenue.

The EV market in the EU continued to improve in December, according to ACEA data. Sales of battery-electric vehicles grew 51% on year. Registrations of hybrid-electric cars increased 5.8%, while plug-in-hybrid models grew nearly 37%.

ACEA said passenger-car registrations in the EU increased 5.8% in December to 963,319 vehicles, with sales up 9.7% in Germany and 2.3% in Italy, but down 5.8% in France.

Write to Mauro Orru at mauro.orru@wsj.com

Chinese automakers with EU exposure will likely benefit the most from recent progress in advanced talks between China and the EU on price commitments for full electric vehicles, DBS analysts say in a note. The two sides aim to address subsidy concerns without relying solely on tariffs, DBS adds. Reduced tariff risks can enhance export competitiveness, improve profit margins and support international growth strategies amid softening domestic demand, DBS says. Companies including SAIC, BYD, XPeng, Leapmotor and Geely will likely benefit the most given their higher EU exposure. In contrast, domestically focused players like Li Auto and NIO may see milder effects, they add. DBS's top picks are Geely and XPeng, given their higher volume growth and broad mass-market product portfolio, the analysts say. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

Nvidia's new artificial-intelligence platform, open models and ecosystem should create demand for robotaxis and support global growth, Citi analysts write in a note. Citi forecasts the global robotaxi market will grow to $188.91 billion in 2034 from $4.43 billion in 2025. China's total addressable market for robotaxis will rise to $67.59 billion in 2035 compared with $39 million in 2025. Nvidia's initiatives will likely increase investors' confidence and directly benefit Pony AI and WeRide from a software angle. Automakers such as BYD, Geely Automobile, Great Wall Motor, SAIC and Xiaomi, as well as ride-hailing platform Didi, could also benefit from the robotaxi industry's growth. In terms of hardware, Chinese lidar sensor maker Hesai will benefit. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

By Mauro Orru

Chinese auto giant BYD posted a more than threefold jump in European sales last month, continuing to outpace both domestic and foreign rivals.

New-car registrations for BYD models, a reflection of sales, surged to 16,158 units in November from 4,821 a year earlier, according to the European Automobile Manufacturers' Association, an industry body also known as ACEA. When including the U.K., Iceland, Liechtenstein, Norway and Switzerland, sales more than tripled to 21,133 vehicles.

ACEA began including BYD in its July data, showing a steady stream of European sales growth for the Chinese group ever since. BYD has been outpacing both domestic carmakers like Volkswagen and U.S. rivals such as Elon Musk's Tesla in the continent in terms of monthly sales growth, but not when it comes to the total number of vehicles sold.

BYD sold 159,869 vehicles in Europe between January and November compared with Volkswagen's 3,263,542 and Tesla's 203,382, according to ACEA data. Still, BYD's growth rate of 276%, far better than Volkswagen's 4.6% growth and Tesla's 28% slump, shows that drivers in the continent are increasingly embracing its lineup of electric and hybrid vehicles.

In contrast, Tesla registrations in the EU fell more than 34% on year in November alone to 12,130 units. When including the U.K., Iceland, Liechtenstein, Norway and Switzerland, sales fell nearly 12% to 22,801.

Tesla has had several months of disappointing sales in Europe as it faces stiff competition. The company also had to contend with the fallout from Musk's involvement with the Trump administration that came to an end a few months ago.

The EV market in the EU improved in November, according to ACEA data. Sales of battery-electric vehicles grew 44% on year. Registrations of hybrid-electric cars increased 4.2%, while plug-in-hybrid models grew more than 38%.

ACEA said EU passenger-car registrations increased 2.1% in November to 887,491 vehicles, with sales up 2.5% in Germany, but down 0.3% in France and flat in Italy.

Write to Mauro Orru at mauro.orru@wsj.com

By Nina Kienle

Chinese automaker BYD again logged higher new-car registrations in Europe last month, as it continues to expand in the continent amid pressure in its home market.

New-car registrations for BYD models, a reflection of sales, increased to 17,470 vehicles from 5,695 vehicles in October 2024, according to the European Automobile Manufacturers' Association, an industry body also known as ACEA.

The figure includes data from the European Union as well as the U.K., Iceland, Liechtenstein, Norway and Switzerland. In the EU alone, BYD registrations rose to 13,350 vehicles from 4,525 vehicles.

While China's largest automaker is continuing its streak of logging higher sales, absolute sales remain far below those of established domestic carmakers like Germany's Volkswagen or Stellantis, the owner of the Jeep and Dodge brands. Both companies respectively sold 308,508 and 157,350 vehicles in Europe last month, according to ACEA.

Meanwhile, registrations for Elon Musk's Tesla fell 48% in the EU last month, according to ACEA data, continuing the streak of disappointing monthly sales for the company this year. Tesla has been dealing with the fallout from Musk's involvement with the Trump administration that came to an end a few months ago.

In the year to date, battery-electric cars reached 16.4% of the EU market share, up from 13.2% in the same period of the prior year. In the first ten months of the year, battery-electric vehicle sales jumped 39% in Germany. Registrations of hybrid-electric cars increased 16%, while plug-in-hybrid models increased by 32%.

ACEA said EU car registrations increased 5.8% in October to 916,609 vehicles, up 7.8% in Germany and up 2.9% in France but down 0.5% in Italy.

Write to Nina Kienle at nina.kienle@wsj.com