The Tamesis
BYD, the world’s largest electric car maker, reported a 19% drop in net profit in 2025 as its sales in China slowed due to “intense” local competition.
Reuters reports It was the Chinese automaker’s first annual profit decline in four years.
BYD said in a filing to the Hong Kong Stock Exchange that net profit attributable to shareholders was 32.6 billion yuan ($4.7 billion) last year, down from 40.3 billion yuan in 2024.
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The electric vehicle giant’s revenue last year also reached 804 billion yuan, a slight increase of 3.5% compared with 2024. This is the weakest growth rate in six years.
China’s electric vehicle industry leads the world, but competition in the domestic market has put pressure on profitability, and BYD and other automakers have turned to overseas markets.
Scrutiny of the EV market is also increasing, with top industry groups Blaming Chinese automakers In May last year, BYD was criticized for inciting a price war a week after it announced a comprehensive trade-in discount.
Wang Chuanfu, chairman of BYD, said in a statement, “Competition in the new energy vehicle industry has entered a white-hot stage and is entering a brutal ‘knockout stage.'”
The profit decline has raised questions about the company’s earnings visibility after years of rapid growth, reinforcing a more cautious view of the electric vehicle industry in China, the world’s largest auto market.
BYD, which stands for “Build Your Dreams,” was once promoted for its affordable Dynasty and Ocean series. In 2024, its annual revenue will surpass that of its American rival Tesla, breaking through the symbolic $100 billion mark and reaching 777 billion yuan.
However, profits in the third quarter of 2025 fell 33% year-on-year, marking the second consecutive quarter of decline.
Policy changes add pressure
The latest slowdown comes after a period of sustained, strong growth, with BYD’s profit in the first quarter of 2025 setting a record for the company during that reporting period.
However, according to Reuters, as competitors such as Leapmotor and Geely Automobile reduce their technological lead, its market share is gradually losing ground.
Changes in Chinese policies also contributed to a decline in its sales. According to Reuters, BYD only produces pure electric and plug-in gasoline-electric hybrid vehicles, so it will be most affected after the expiration of the new energy vehicle purchase tax exemption.
Sales this year have also been affected by revised subsidies that favor models priced above BYD’s core budget segment.
Cars priced under 150,000 yuan ($21,699) accounted for more than 61% of BYD’s domestic sales in November, according to a Reuters analysis of the company’s filings and sales data from Chinese auto analytics platform DATADIC.
In an effort to revive sales, BYD launched 11 models with faster-charging batteries and pledged to expand its flash charging network. However, analysts said the pricier lineup is unlikely to be enough to boost sales as consumers increasingly seek affordable options.
overseas dream
BYD’s overseas ambitions appear to be picking up pace amid a slowdown in the domestic economy. Its vehicles are currently operating in “119 countries and regions around the world,” the company said in a filing on Friday, adding that it would continue to expand overseas sales.
A report from the European Automobile Manufacturers Association shows that BYD sold more than 13,000 vehicles in EU countries in September, a year-on-year increase of 272.1%.
According to Reuters, the automaker’s overseas sales more than doubled to 22.7% of total sales last year and more than doubled again to 50% from January to February.
Even so, overseas sales were not enough to offset weak domestic sales.
The gross profit margin of overseas sales last year was 19.5%, a year-on-year increase of 1.9 percentage points, while domestic sales fell by 3.5%.
- AFP, Additional editing by Vishakha Saxena, Information provided by Reuters
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