The Chinese electric carmaker BYD, until recently the world’s top EV seller, is facing a sharp downturn in domestic demand as government support dries up and price battles rage across the country’s once-booming green car sector.
A 30% drop in sales in the first month of the year has sent the company scrambling to maintain stability abroad. At home, it ventures into ride-hailing to expand its operations and feels the hot breath of Geely.
The crown around China’s electric vehicle giant BYD has dropped a few jewels at the start of 2026. The automaker, which only last year edged past Tesla in global EV sales, reported a sharp 30% fall in deliveries in January.
Analysts were braced for bad news after purchase subsidies for buyers were rolled back at the end of 2025, but the scale of the decline has raised eyebrows.
Blazing December
In total, BYD delivered just over 210,000 vehicles last month, including both passenger models and light commercial vehicles. That number is not just down by nearly a third from a year earlier, but also a full 50% off the back of a blazing December, which was fueled by the forthcoming end of the incentives.
Long reliant on affordable electric city cars, BYD was particularly exposed to these subsidy cuts that hit the lower end of the market hardest. BYD’s battery-electric range saw the most dramatic pullback, with a 33.6% year-on-year dip, while plug-in hybrids fared slightly better, though still sliding more than 28%.
The trend tilts the brand’s balance toward PHEVs, though the latest performance marks the tenth consecutive month of year-on-year declines in that segment.
Foreign markets to the rescue
To remedy faltering domestic demand, BYD is looking outward. The company’s exports surged to more than 100,000 units in January, up over 50% from the year before. Foreign markets now make up nearly half of BYD’s total monthly sales, a remarkable shift for a company that, not long ago, depended almost entirely on its domestic base.
However, the pivot comes with caveats: as BYD ramps up production at its new plant in Hungary, fewer of those exports will come from Chinese factories, doing little to address slowing production at home.
Linghui for ride-hailing
The downward spiral didn’t deter BYD from adding a fifth brand to its portfolio: Linghui, aimed at the ride-hailing and taxi markets. It is a quiet but deliberate move into fleet sales, at a time when individual buyers seem to be stepping back.
The details are sparse, but regulatory filings suggest it will launch with a small stable of battery-electric saloons and at least one hybrid van, repurposed from BYD’s existing platforms.
Even with these actions, the road ahead looks bumpy. BYD remains the best-selling EV maker in China for now. Still, it seems to be losing the aforementioned crown as a whole, handing it over to Volvo’s parent company, Geely, which has become the country’s most popular car brand overall. Industry watchers say sales may stabilise later in the quarter, but for BYD, the big question is whether growth abroad can outpace the drag at home.
