Fast facts: Why leading EV maker BYD is in a profit slump
The appeal and demand for electric vehicles are surging globally — yet BYD, the world’s largest EV maker, can’t seem to ride on this trend recently as it reported another profits slide amid intensifying headwinds in China’s car market.
From July to September, BYD’s profit plummeted by 33% to 7.92 billion yuan ($1.1 billion). Its total revenue absorbed a softer 3% drop to 194.98 billion yuan ($27.3 billion), though this stilled missed the 216 billion yuan ($30.30 billion) estimate.
Here are some factors behind the slump
- Fierce competition at home: BYD recently lost its position as China’s top-selling automaker to state-owned SAIC Motor Corp. A fierce price war among Chinese carmakers has also eroded margins, weighing on performance even for the world’s largest EV producer.
- Inventory reduction efforts: Analysts say BYD deliberately slowed sales to clear existing stock ahead of its 2026 model launches. Citigroup noted that BYD’s inventory levels fell in September — a short-term drag that could strengthen margins later.
- More R&D spending: BYD is investing heavily in research and development to support new luxury brands Yangwang and Fangchengbao, a move that may squeeze near-term profits but boost longer-term returns.
- Slower growth at home, faster abroad: While domestic demand softens, BYD’s overseas sales jumped 160% year-on-year, buoyed by demand in Europe and Latin America. Analysts say a stronger export mix could help BYD regain market favour in early 2026.
With global expansion accelerating and high-end models on the horizon, BYD’s next growth phase is expected to depend on whether it can stabilise margins and outpace China’s fierce EV rivalry.
This story is written and edited by the Global South World team, you can contact us here.
