The Latest Example of BYD Becoming No. 1 Globally Isn't a Joke

At first, Chinese automakers were the butt of a joke by well-known Tesla CEO Elon Musk. Then Chinese autos became a real concern, and their rapid development and expansion became a hushed secret.

Now it's an industry consensus: Chinese automakers such as BYD (OTC: BYDDY) are a serious threat to automakers globally, forcing the U.S. to quickly slap on massive tariffs to prevent, for now, their entry into the U.S. market. Similarly, many scoffed at BYD's bold claim that it would catch Toyota Motor in global sales volume by the end of 2030 -- an achievement that would require more than doubling its current global sales volume.

But this is no longer a joke, and more data just came out overseas that emphasizes just how rapidly markets are changing. So is it time for investors to scoop up shares of the Chinese auto giant?

Show me the numbers

The threat of Chinese automakers undercutting the competition and overwhelming the market with advanced, affordable electric vehicles (EVs) may not be as clear to U.S. investors as it is overseas, since tariffs currently "protect" us from that development. Europe, however, is an entirely different ballgame, as Chinese automakers are increasingly exporting their vehicles overseas to avoid the margin-eroding price war in China's domestic automotive market.

The speed at which BYD is making its presence known in Europe is impressive. Starting more broadly, though, Chinese autos more than doubled their sales in Europe in August, setting a record market share of 11.7%. Chinese brands' sales soared 111% in a European market that grew only 4.6% in August. Of course, one company helping to lead the charge was none other than BYD Co., which has seen its global sales volume soar, even surpassing Detroit legend Ford Motor Company last year.

Image source: BYD Co.

King of the hill

Looking more specifically at BYD in Europe, its sales jumped an even more impressive 131% to finish August as the best-selling Chinese brand in Europe. It's also clear, looking at sales volume growth, that BYD is accelerating toward an even more lucrative future: BYD and Chery combined accounted for 60% of overall Chinese volume growth in August.

Skeptics might be saying to themselves that "it's probably just a high percentage from a low base number," but that would be disingenuous, incorrect, and more importantly, irrelevant. BYD checked in as the top-selling Chinese brand in Europe for May, July, and August. Zooming out just a little, BYD is also the top-selling Chinese brand in Europe through the first eight months of 2026, with sales volume up 144% to 232,600 units.

A catalyst and a hurdle

Some might be wondering why tariffs weren't slapped on Chinese EVs in Europe, as in the U.S., and the answer is that Europe attempted to do so, but it was ineffective. More specifically, the European Union has a maximum tariff of 35.3% on Chinese battery electric vehicles (BEVs), on top of the standard 10% duty.

But that left a plug-in hybrid electric vehicle (PHEV) loophole. Chinese PHEVs aren't subject to additional import tariffs, only the standard 10% duty, and already European lawmakers are discussing changes to the policy while simultaneously asking China to voluntarily limit hybrid imports to avoid a potential trade war, according to the Financial Times.

Back to the original point: Chinese automakers have arrived globally; they're for real, and it's evident from sales data worldwide. When BYD states that it intends to surpass Toyota as the world's top-selling automaker (not just in EVs or hybrids) by 2030, it should be taken very seriously.

But one hurdle remains: the significant tariff barrier to entering the lucrative U.S. market. It's unclear how or when Chinese autos, such as BYD, could enter the U.S. market, but it's likely to happen in time. Whether BYD can surpass Toyota without the U.S. market is hard to say, though, of course, BYD believes it can. Either way, savvy investors should be doing extensive research on BYD because its growth in Europe is merely a hint of what it is doing globally.

Daniel Miller has positions in Ford Motor Company. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.