BYD swerves: profit -33%, first drop in revenue in five years

China's electric vehicle giant BYD is skidding and slowing down after years of full-speed growth. In the third quarter, net profit fell 33% year-on-year to 7.82 billion yuan (about $1.1 billion), the worst figure in more than four years and the second consecutive decline. Revenues fell 3% to 194.98 billion yuan, marking the first decline since 2019 and falling short of analysts' expectations (215 billion).

Domestic competition and the price war that is eroding margins in the world's largest electric car market are weighing heavily. BYD's domestic share fell to 14% in September from 18% a year earlier, while rivals such as Geely, Changan and Leapmotor (Stellantis' partner in Europe) are gaining ground thanks to cheaper and more high-tech models. Leapmotor alone delivered 395,516 units between January and September 2025, a year-on-year growth of 129%. And Leapmotor itself accelerated from 500,000 to 1 million vehicles produced in just 343 days, the fastest pace among new Chinese manufacturers.

Instead, in the third quarter, the Shenzhen-based group's sales suffered their first contraction since 2020: they stopped at 1.15 million vehicles, down 1.8% year-on-year. To defend volumes, therefore, BYD launched new discounts on flagship models such as the Qin Plus, a move that further weighed on profitability.

The stock on the Hong Kong Stock Exchange has lost 32% from its May highs, a drop of USD 45 billion in market capitalisation (BYD is now worth USD 128 billion, the fourth-largest in the world after the unstoppable Tesla, Toyota and Xiaomi), and is now in its fifth consecutive month of declines, the longest streak since 2018. Investors are beginning to doubt the seemingly unstoppable growth of the group founded by chairman and CEO Wang Chuanfu, while the Chinese government is calling on manufacturers to curb unbridled price competition.

BYD has recently cut its 2025 sales target by 16% to 4.6 million vehicles, but is aiming to double its exports, driven by Europe and Latin America. In Japan it will soon launch a mini-EV developed to challenge the k-cars at home. And it should not be forgotten that in the space of thirty years BYD has transformed itself from a battery factory in Shenzhen into the world's largest producer of electric vehicles.