Short interest in the Chinese EV manufacturer surged to a level last seen in November 2021, with bearish positions against the firm accounting for about 4.4% of outstanding shares as of Tuesday, according to IHS Markit Ltd. data.

That makes it the second-most-shorted stock on the Hang Seng China Enterprises Index, after XPeng Inc.’s 5.2%.

The EU probe may add near-term selling pressure for BYD after short sellers piled into the stock amid a recent rally and on anticipation for Berkshire Hathaway Inc to reduce its stake in the carmaker, said Steven Leung, executive director at Uob Kay Hian Hong Kong Limited.

Its Hong Kong-listed shares fell as much as 3.8% Thursday following the European bloc’s unusually aggressive stance to ward off a flood of cheap Chinese cars into the region. The stock is still up 27% so far this year, while a benchmark index has declined more than 6%.

While the investigation is “negative for near-term sentiment on large China-based new energy vehicle players such as BYD,” the company’s active capacity expansion in Europe will help make it immune to import duties in the longer term, Kelvin Lau, analyst at Daiwa Capital Markets Hong Kong Ltd, wrote in a note.