BYD experiences first profit drop since 2021
Chinese automaker BYD said its annual sales rose to a record level, surpassing Tesla, but its profits fell under the pressure of fierce competition for the first time since 2021.
BYD, the largest electric vehicle maker, is expanding into global markets including Latin America and Europe, where auto analysts say profit margins are generally higher than in China.
It’s also banking on the latest tech upgrades to boost appeal, announcing a new, powerful, fast-charging battery a few days before its earnings report.
Analysts are predicting a tough road ahead this year, with competition in China at punishingly high levels.
But in a boost for EV manufacturers, rising oil and oil prices due to the Iran war are starting to revive interest in renewable energy.
BYD’s annual sales reached US$116 billion ($A169 billion), the company said on Friday.
Domestic sales of Shenzhen-based BYD, which sold 2.26 million electric vehicles last year and overtook Tesla in 2025, up 28 percent from the previous year, have been declining recently.
Tesla said it delivered 1.64 million vehicles, down nine percent.
The Chinese company’s revenue increased by 3.5 percent to 804 billion yuan ($169 billion) in 2025; This was another record, eclipsing rival Tesla’s full-year revenue of $94.8 billion.
However, BYD said its annual profit was 32.6 billion yuan last year, a 19 percent decrease compared to 2024.
The company last recorded a decrease in profit in 2021.
The Chinese auto group reported a decline in sales for the sixth consecutive month.
In the January-February period, total sales decreased by 36% year on year to 400,241 units; because the increase in foreign sales did not compensate for the persistent weakness in domestic demand.
“They can’t rely on mass-market EVs to help them keep the volume they sell at the same level,” said Chris Liu, senior analyst at Shanghai-based advisory group Omdia.
A fierce price war in China, the world’s largest auto market, has hurt BYD’s profitability, and rivals such as Geely Auto begin gaining ground in early 2026.
“We also recognize that competition in the NEV (new energy vehicle) industry has reached its highest level and is going through a brutal ‘knockout phase,'” Chairman Wang Chuan-fu said in Friday’s earnings report.
Broad government subsidies aimed at encouraging Chinese drivers to switch to electric vehicles were extended but reduced this year, putting pressure on automakers.
Expectations are that the Iran war and the global energy shock will push more people to switch to electric vehicles, and BYD will make profits at home and abroad.
BYD shares traded in Hong Kong fell more than 20 percent last year but rebounded in March.
BYD plans to increase its global market share to increase its profits abroad.
The company, which has made great progress in the United Kingdom, Brazil and Argentina, aims to sell approximately 1.3 million vehicles abroad in 2026, compared to last year’s sales figure of 1.05 million.
The strategy of establishing and expanding factories abroad will also help boost international market growth, said Claire Yuan of S&P Global Ratings.
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