BYD doubles profit, strengthens hold on EV market as Tesla struggles

Chinese electric vehicle giant BYD extended its lead in the global EV race with a record-setting first-quarter profit. The carmaker solidified its dominance at home while advancing its global ambitions. But over in Europe, the brand shifted strategy as it struggled with its dealership footprint. 

The Shenzhen-based car maker’s net profit rose to 9.2 billion yuan ($1.26 billion) for the first three months of 2025. An impressive jump, as this doubles the earnings from the same period last year. Moreover, this 100.4% year-over-year surge marked BYD’s fastest profit growth in nearly two years despite troublesome trends in the geopolitical marketplace. The results also outperform those of its key rival, Tesla, a distancing manoeuvre that was helped by the latter’s steep decline in sales (-13%) and revenue (-71%).

Revenue miss

The results showcase BYD’s aggressive market positioning, including a bold pricing strategy and the rollout of advanced technologies like its “God’s Eye” driver-assistance system, which is now standard across its lineup. This strategy has helped the company capture 13.6% of China’s fiercely competitive EV market in the first quarter, edging past Volkswagen’s combined joint venture share of 12.1%. A year earlier, BYD trailed VW. The tables have turned, reflecting how Chinese customers increasingly start preferring local brands, which is also caused by a fierce price war.

BYD’s strategy to escalate the domestic EV price war has forced rivals like Geely, Leapmotor, and Toyota to recalibrate their offerings, incorporating innovative features and competitive pricing. But while BYD’s revenue for the quarter climbed 36.4% year-over-year to 170.4 billion yuan ($23.38 billion), it fell short of analysts’ expectations of 179.7 billion yuan. The revenue miss does point to broader market uncertainties, such as the lingering impact of global tariffs on Chinese EV exports. 

More focus on PHEV

The company’s sunny results might hide the challenges that remain imminent. With about 90% of its sales coming from China, BYD needs to push harder to expand globally. It aims to export 800,000 vehicles this year, but the tariffs remain a significant headwind.

BYD’s European ambitions, in particular, have faced bumps. After struggling to build a robust dealer network and hire executives with local expertise, the company is overhauling its regional operations. It recently recruited several former Stellantis managers to key leadership roles. 

These moves follow strategic missteps, including an initial reluctance to offer plug-in hybrids in markets where full EV adoption remains slow. Under the new management, BYD has shifted course, making the plug-in hybrids central to its European strategy.

All in all, BYD’s sales trajectory remains strong. Its vehicle deliveries have surged sevenfold since 2020, hitting 4.2 million units in 2024. Having overtaken Tesla last year as the world’s top EV seller, BYD now ranks the sixth-largest automaker globally. And its winning streak doesn’t seem to end anytime soon.