BYD shares climbed in Hong Kong trade after reports of potential battery supply talks with Ford Motor Company. The Chinese electric vehicle giant saw its stock rise as much as 2.5%, outpacing broader market trends. This comes amid Ford's recent pivot towards hybrid vehicles, abandoning several EV models due to waning demand in its core markets.

The potential deal would see BYD supplying batteries for Ford's hybrid models, particularly in markets outside the U.S. This strategy circumvents Washington’s steep tariffs on auto part imports from China. BYD, China’s leading EV maker, stands to gain a new revenue stream as it faces heightened competition and slowing sales in its domestic market.

For Ford, this partnership offers access to cheaper batteries and advanced EV technology. The American automaker has been scaling back its EV ambitions, focusing on hybrids as a more viable option. This move follows a trend of global automakers seeking cost-effective battery solutions to remain competitive in the evolving EV market.

Analysts expect such partnerships to become more common as companies seek to optimize costs and technology. BYD's strong position in the battery technology sector makes it an attractive partner for global automakers looking to expand their hybrid and EV offerings.