The world’s largest maker of electric vehicles, BYD, reported a 19% decline in annual net profit in 2025, as its sales in China slowed amid a ‘fever pitch’ in local competition.
Reuters reported that this was the Chinese automaker’s first annual profit drop in four years.
BYD’s net profit attributable to shareholders last year was 32.6 billion yuan ($4.7 billion), down from 40.3 billion yuan in 2024, the company said in a filing to the Hong Kong Stock Exchange.
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The EV giant also recorded 804 billion yuan in revenue last year, up a modest 3.5% compared to 2024. That was its weakest growth rate in six years.
China’s EV industry is world-leading but a cutthroat domestic market has weighed on profitability, with BYD and other carmakers turning to overseas markets in response.
Scrutiny of the EV market is also growing, with a top industry group rebuking Chinese automakers last May for fuelling a price war, a week after BYD announced sweeping trade-in discounts.
“Competition in the NEV industry has reached a fever pitch, and is undergoing a brutal ‘knockout stage’,” BYD’s chairman Wang Chuanfu said in a statement, using an acronym for new energy vehicles.
The profit dip raises questions about the company’s earnings visibility after years of rapid growth, reinforcing a more cautious view on the EV sector in China, the world’s largest auto market.
BYD, short for ‘Build Your Dreams’, was once propelled by its affordable Dynasty and Ocean series. Its annual revenue surpassed that of its American rival Tesla in 2024 and crossed the symbolic $100 billion mark, at 777 billion yuan.
However, profit in the third quarter of 2025 slumped by 33% year-on-year, its second consecutive quarterly decline.
Policy changes add pressure
The recent slowdown comes after a period of sustained, intense growth, and BYD’s profit in the first quarter of 2025 was a record for the company in that reporting period.
But has also been losing ground as rivals such as Leapmotor and Geely narrow its technological lead, Reuters said.
Policy changes in China have also contributed to the decline in its sales. BYD makes only all-electric and plug-in petrol-electric hybrid vehicles, so it has suffered the most from the expiration of purchase tax exemption on new energy vehicles, Reuters reported.
Sales were also impacted this year by revised subsidies favouring models priced higher than those in BYD’s core budget segment.
Cars going for under 150,000 yuan ($21,699) accounted over 61% of BYD’s domestic sales in November, based on a Reuters analysis of the company’s filings and sales data from Chinese auto analytics platform DATADIC.
To revive sales, BYD unveiled 11 models with a faster-charging battery and pledged to grow its flash charging network. Still, the higher-priced lineup is unlikely to be enough to boost sales as consumers increasingly seek affordable options, analysts said.
Overseas dreams
Amid the slowdown at home, BYD’s overseas ambitions appear to be gathering pace. The firm said its vehicles now operate in “119 countries and regions worldwide”, in Friday’s filing, adding that it would continue to expand sales abroad.
BYD sold more than 13,000 units in European Union countries in September, a year-on-year increase of 272.1%, according to a report by the European Automobile Manufacturers’ Association.
The automaker’s overseas sales as a share of the total more than doubled to 22.7% last year and more than doubled again to 50% in January-February, Reuters reported.
Even so, overseas sales are not enough to offset weak sales at home.
Overseas sales delivered a 19.5% gross profit margin last year, up 1.9 percentage points from a year prior, versus a 3.5% slide from domestic sales.
AFP, with additional editing by Vishakha Saxena and inputs from Reuters
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Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]
