BYD, the world’s largest electric vehicle manufacturer, reported a 19% decline in net profit for 2025. It’s the company’s first such drop in four years.
The results reveal the growing cost of competing in China’s saturated EV market. BYD is hastily looking beyond its home borders to counter the downward trend.
The numbers in brief
Profit for BYD fell to 32.6 billion yuan (4.08 billion euros) in 2025, down from 40.3 billion yuan (5.2 billion euros) a year earlier. However, revenue grew a modest 3.5% (to 804 billion yuan or 101 billion euros), which represents the smallest annual revenue increase in six years.
Basically, BYD sells more cars but at lower profit margins. It also shows in its profit margin, which narrowed from 19.4% to 17.7%.
BYD management itself attributed this squeeze to what it described as a “knockout stage” in China’s domestic auto market. In this phase, brands are sacrificing profitability to protect or expand their share of an extremely competitive field.
Expanding abroad to compensate
Ironically, at the root of the problem lies an aggressive pricing strategy that BYD itself helped to fuel. In May last year, the company announced discounts of up to 34% across around 22 of its models.
The China Association of Automobile Manufacturers publicly criticised the trend, warning that such tactics risked deepening what it called “harmful competition” across the sector.
BYD was not singled out by name, but the message was pointed. Chinese authorities later added their voice, urging the industry to pull back from what they termed “irrational competition,” and introduced measures to cap sales growth over the following two years.
In response, BYD is doubling down on international markets. Overseas exports crossed the one million unit mark for the first time last year, a 1.4-fold increase year-on-year.
By February 2026, monthly European registrations had climbed to nearly 18,000 units, narrowly ahead of Tesla in the same market. For this year, the Chinese brand has set an overseas sales target of 1.3 million units. The ambition is to source 50% of total sales from outside China by 2030.
Still a giant, but facing headwinds
As the figures show, BYD nonetheless grew. It sold 4.6 million new energy vehicles in 2025, up 7.7% year-on-year. But the new year brings new complications. Sales stalled in the first two months of the year, and BYD briefly lost domestic market leadership in China to rival Geely.
Against that backdrop, the company continues to invest heavily in technology: R&D spending rose 17% last year. Earlier this month, BYD unveiled a second-generation Blade Battery alongside new flash-charging technology (1,500 kW) capable of taking a vehicle from 10% to 70% charge in just five minutes.
It plans to deploy 20,000 such charging stations across China by the end of 2026. As for Europe, no exact figure was provided; estimates range from 200 to 2,000 units.
