This global EV stock could double in price in 3 to 5 years, analyst says

Published Tue, Feb 6 20246:17 PM EST

Competition is fierce in the electric vehicle industry, with investor favorite Tesla competing with a slew of Chinese rivals. But Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors, believes that one stock will come out ahead. That's Hong Kong-listed BYD , which he has declared "the next Toyota." "I think BYD [is] certainly kind of the low cost leader in terms of scale, production, in terms of technology, in terms of maturity. So we like it in the long run," he told CNBC's " Street Signs Asia ." Hsu believes that as the EV market consolidates, BYD is "for sure going to emerge a winner." "I think in three to five years, I could easily see BYD at twice the current price," he said. In January, data showed that BYD dethroned Tesla in the fourth quarter as the top EV maker globally, and also surpassed Tesla's production for a second straight year in 2023. BYD is now expanding aggressively overseas after dominating its domestic market in China. Like Tesla, it's going beyond selling cars and manufacturing its own batteries and other components to stay competitive. Competition for China's electric car market will continue to heat up in the next two to three years, pushing prices down, BYD said last week. One potential curveball for the Chinese EV market is a U.S. decision to raise tariffs, which is reportedly under discussion . But Hsu believes that the markets have already priced in the possibility that those tariff hikes will be imposed. He also pointed out that Toyota went through a similar challenge to build its share in the U.S. and Europe markets — and feels that BYD can "find their way" as well. According to FactSet, analysts covering the stock give it potential upside of 81.1% to the average price target, with 94% giving it a buy rating. For global investors who want to buy BYD, its shares are listed on the Hong Kong exchange. Alternatively, they can buy them via an ETF. BYD takes up 7.9% of the KraneShares MSCI China Clean Technology Index ETF and 7.3% of the CoreValues Alpha Greater China Growth ETF. — CNBC's Tanvir Gill and Evelyn Cheng contributed to this report.