BYD’s profits fell by 19% despite billions in sales: what’s happening with China’s auto giant
30 March 09:43
Chinese auto giant BYD, which is China’s largest electric vehicle manufacturer by sales volume, ended 2025 with a significant decline in financial results. The company reported its first annual drop in net profit since 2021, as well as its weakest revenue growth in the past six years. This is stated in the company’s 2025 financial report, according to "Komersant Ukrainian"
At the end of 2025, BYD’s net profit fell by 19% to 32.6 billion yuan, while revenue grew by only 3.5% to approximately 804 billion yuan.
For a company that until recently had been experiencing explosive growth, this marks a sharp slowdown in its development pace, notes Nikkei Asia.
What happened to BYD’s profits
The fourth quarter of 2025 proved to be the weakest for the company. During this period, BYD’s net profit fell by 38.2% year-over-year to 9.3 billion yuan, while quarterly revenue decreased by approximately 13.5% to 237.7 billion yuan.
This marked the company’s third consecutive quarter of declining profits.
Analysts attribute this primarily to a fierce price war in the Chinese electric vehicle market, weakening domestic demand, and pressure on margins. Reuters also notes that BYD was particularly vulnerable due to the large share of budget models in its domestic sales.
Why this matters for the entire electric vehicle market
BYD’s problems show that even the largest electric vehicle manufacturers in China are now operating under significantly more challenging conditions than they were a year ago. The company maintains massive sales volumes, but profitability is falling and competition is intensifying. This signals that the Chinese market is entering a phase of intense consolidation, where it is no longer enough for manufacturers to simply ramp up production—they must maintain profitability and rapidly update their model lineup.
The reduction in government support dealt an additional blow to the market. Reuters and AP note that BYD’s sales were negatively impacted by changes to the electric vehicle incentive program and the expiration of certain tax breaks. It was after this that China’s domestic market began to cool faster than investors had expected.
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What’s happening with sales in 2026
The start of 2026 also offered little cause for optimism. In January, BYD’s sales fell by 30.1% year-over-year, and in February, global sales dropped by 41.1%—the company’s worst February performance since the pandemic. Overall, the decline for the first two months of 2026 was 35.8%.
Against this backdrop, BYD’s shares, which trade in Hong Kong, have fallen significantly from their spring 2025 highs. Investors are reacting not only to the drop in profits but also to fears that competition in China will remain fierce for a long time to come.
Does BYD Have a Chance at Recovery?
Despite weak earnings, the company is betting on overseas markets, new models, and technological upgrades. Reuters notes that it is overseas sales that are partially mitigating pressure from the Chinese market. AP adds that BYD plans to expand its presence more aggressively in Europe, Latin America, and other markets, as well as promote new fast-charging solutions.
For consumers and competitors, this means one thing: the electric vehicle market will become even more competitive by 2026. And for BYD itself, the coming quarters will show whether the company can regain its former growth momentum without sacrificing profitability.
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