BYD reported its first annual profit decline since 2021 on Friday, as the world’s largest electric vehicle maker grappled with a price war in China that eroded margins even as the company sold a record number of cars.
Net profit fell 19% to 32.6 billion yuan ($4.72 billion) in 2025, down from 40.25 billion yuan a year earlier, according to filings with the Hong Kong and Shenzhen stock exchanges.
The result missed a Bloomberg compiled consensus forecast of 35.4 billion yuan.
Revenue rose 3.5% to 803.9 billion yuan, also below analyst expectations of 836 billion yuan and a fraction of the 29% growth recorded in 2024.
Chairman Wang Chuanfu warned that competition in China’s EV market had reached “fever pitch and is undergoing a brutal ‘knockout stage.'”
BYD‘s mainland-listed shares remain 22% below their May 2025 peak, despite a 17.5% rally since the US and Israel attacked Iran — which boosted investor expectations for a long-term shift toward clean energy.
Record Sales, Shrinking Margins
BYD delivered 4.6 million vehicles in 2025, up 7.7% from 4.27 million a year earlier.
The company surpassed Tesla in total EV sales for the first time on a full-year basis, cementing its position as the world’s largest seller of electric and plug-in hybrid vehicles.
However, the volume gains came at a cost.
Revenue growth of 3.5% against sales growth of 7.7% implies a decline in average selling price per vehicle — consistent with the repeated price cuts BYD implemented throughout the year to fend off competition from Geely, Huawei, SAIC, Xiaomi, Changan, and Chery brands.
Geely outsold BYD in China for February, for the second consecutive month.
In the first quarter of 2025, BYD nearly doubled its net profit year-on-year.
By the third quarter, profit had fallen 32.6% compared to the same period in 2024, and revenue declined 3.1%.
The fourth quarter came in worse than consensus, with net profit falling 38% year-on-year to 9.53 billion yuan — well below the 15.02 billion yuan record set in Q4 2024.
The company’s R&D spending has funded technologies including the second generation Blade Battery, the DM-i and DM-p hybrid platforms, the “God’s Eye” driver-assistance system — which is now installed in 1.7 million vehicles.
Overseas Expansion
BYD exported more than one million vehicles in 2025 for the first time, covering over 100 countries.
The company has set an overseas sales target of 1.3 million units for 2026, roughly a 24% increase.
Overseas sales carry higher profit margins than domestic sales, making international expansion the most direct path to recovering profitability.
Revenue from overseas markets reached 221.9 billion yuan in 2024, and the company’s export mix has been shifting toward higher-margin plug-in hybrid and mid-range models.
BYD leadership has previously outlined a long-term target of 10 million annual vehicle sales, with roughly half coming from outside China.
To support the push, the company has ordered a fleet of eight ships to transport vehicles overseas and is building production capacity across multiple continents.
Factories are operational or under construction in Brazil, Hungary, Indonesia, Thailand, Turkey, and Uzbekistan.
A new R&D centre near Rio de Janeiro will receive 300 million Brazilian reais ($56.9 million) in investment, with construction starting this year and an opening planned for 2028.
The company’s Brazilian plant in Camaçari has been assembling vehicles for nearly a year.
