China's EVs in freefall

BYD, Xpeng and Geely are crashing

February 04, 2026

 

☕️ Good morning friends,

We just landed in Shenzhen, and when you’re here, you really wonder how much longer it will take until we’re buzzing through the world in transport drones.

But for now, we’re still driving cars, and the industry really never gets boring…

More on that in today’s Top Bit.

Also in this edition:

  • India's tariff reset: Trump cuts punitive tariffs from 50% to 18%, Nifty jumps by 4.5%.

  • Door handle ban in China: Tesla design will be banned starting in 2027 for safety reasons—the first country in the world to do so.

  • Robot record: Shanghai's MirrorMe presents Bolt—runs at 10 m/s, making it the fastest in its class.

Enjoy the read! 📰

👉🏻 P.S. On LinkedIn, you can get even more insights, info, and knowledge from Asia.

Nikkei breaks new record: Japan's leading index jumps 3.92% to 54,720.66 points, marking a new all-time high. Investors are betting on expansionary fiscal policy ahead of Sunday's parliamentary elections, after polls predict a majority for the ruling LDP.

TOP BIT

BYD in freefall: 30% fewer sales, stock price collapses

The Chinese EV giant BYD is experiencing a brutal start to 2026.

In January, the corporation sold 30% fewer cars than in the previous year—the fifth consecutive month of decline. The stock plummeted in Hong Kong by up to 8% and dragged the entire sector down: Xpeng -8%, Nio -6%, Xiaomi and Geely also in the red.

Details & Figures

BYD sold only 210,051 vehicles worldwide in January—30% below the previous year and 50% below December. Production also fell by 29%.

The Reason: China's new EV subsidies are now based on vehicle price instead of a flat rate. This makes cheap EVs—BYD's core business—less attractive.

Geely sold around 60,000 more cars than BYD in January and took market leadership in China for the first time.

Silver Lining Abroad

Despite the domestic slump, there is a massive sign of life from abroad:

  • Export Record: BYD shipped 100,482 cars abroad in January (+51% year-on-year).

  • Structural Change: Almost half of all BYD sales now take place outside of China. Thus, BYD is rapidly transforming from a Chinese champion into a true global player.

  • 2026 Goal: The corporation is targeting 1.3 million exports for the full year—an increase of 24% compared to 2025, even if the target was internally corrected slightly downwards from 1.6 million.

Good to know: Why January can be deceptive 

Chinese New Year falls on February 17th this year (2025: January 29th). During this time, factories close, and sales traditionally collapse. Analysts recommend looking at the first quarter as a whole—only then will the true picture emerge.

📊 All details & data: Reuters, Investors

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NUMBER OF THE DAY

That’s how much Hong Kong’s annual charity drive Operation Santa Claus raised most recently.

Tragedy galvanized the city: The campaign initially aimed to raise HKD 11 million for 13 charities. After the devastating Tai Po apartment fire on November 26, which killed 168 people and left around 5,000 homeless, an emergency appeal raised the equivalent of USD 2.44 million.

MARKET BIT

US trade reset signals potential turnaround for Indian markets

India’s financial markets are reacting with visible relief to a long-awaited trade agreement between Washington and New Delhi. The deal could mark a turning point for foreign capital flows into the country.

🤝 US President Donald Trump announced a significant reduction in US tariffs on Indian goods, following months of pressure related to India’s oil imports from Russia.

The details

The US will cut the so-called “reciprocal tariff” on Indian exports to 18 percent. In addition, an extra 25 percent punitive duty, previously imposed over India’s purchases of Russian crude oil, will be removed.

  • Result: The combined tariff burden drops from as high as 50 percent to a level that restores India’s competitiveness relative to regional peers.

The response was swift:

  • Nifty 50 futures surged by as much as 4.5 percent in overnight trading at GIFT City.

  • The rupee strengthened after hitting multiple record lows in recent sessions.

  • Risk appetite returned, a classic “risk-on” signal after months of defensive positioning.

The timing

Indian equities had just recorded their worst January since 2016, alongside record foreign investor outflows, driven by tariff uncertainty, weak earnings momentum, and broader macro concerns.

At the same time, India’s valuation premium versus other Asian markets has fallen to its lowest level in nearly five years. Much of the so-called “India premium” has already been priced out.

What remains unclear is whether India is willing — or able — to follow through on purchase commitments of up to $500 billion to the United States.

👉 Full story: Bloomberg, FinancialTimes, CNBC

HEAD OF THE WEEK

🇮🇳 Nita Ambani

💎 The woman who turned wealth into influence

From schoolteacher to the public face of Reliance Foundation, Nita Ambandi leads India’s largest private philanthropy, shaping impact across education, healthcare, sports, and culture.

  • Her real strength lies in soft power: She turned Mumbai Indians into a global sports brand and created the Nita Mukesh Ambani Cultural Centre to position Indian art and fashion on the world stage.

Her edge: Ambani understands that modern power isn’t just financial, it’s cultural. Visibility, storytelling, and global positioning are her tools for success.

HIGHLIGHTS 

🇨🇳 China bans hidden car door handles: Starting January 1, 2027, all vehicles sold in China must be equipped with mechanical door handles, both inside and outside. Retractable handles popularized by Tesla have been banned following several fatal accidents in which rescuers were unable to open the doors of burning vehicles. The ban also affects Chinese manufacturers such as Xiaomi and Aion, which had adopted the design. China thus becomes the first country worldwide to prohibit this design solution on safety grounds.

🇯🇵 Nintendo Switch 2 exceeds expectations: Nintendo sold 7 million Switch 2 consoles in the December quarter, reaching a total of 17.37 million units since launch. The company is maintaining its full-year forecast of 19 million units sold and calls the Switch 2 the fastest-selling console in its history. Revenue rose 86% to ¥806.32 billion, while games such as Mario Kart World have already sold 14 million copies.

🇰🇷 LG patents AI for materials research: LG AI Research has received a patent for Exaone Discovery, a generative AI platform designed to accelerate the discovery of new materials and drugs. The multimodal AI analyzes unstructured scientific data—such as formulas and molecular structures—directly from research papers without prior data standardization. The patent covers the entire AI-driven research process and is already being used at LG Household & Health Care to develop cosmetic ingredients.

🇨🇳 Chinese robot runs at 10 meters per second: Shanghai-based company MirrorMe unveiled the humanoid robot Bolt, which at 10 m/s is considered the fastest running robot in its class. The robot stands 175 cm tall and weighs 75 kg, and is named after sprinter Usain Bolt, with the goal of achieving human-level movement capabilities. MirrorMe was founded only in May 2024 but has been researching the speed limits of robotics since 2016; a previous model already reached 13.4 m/s.

FORTUNE COOKIE

We hope you woke up with main character energy today.✨

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