BYD's sales hit a new high, but profit pressure has become even greater.

（Source: Blog COVER）

In terms of scale, BYD is still the most dominant automaker among Chinese companies today. In 2025, the company achieved full-year operating revenue of 803.96 billion yuan, up about 3.5% year over year. Full-year sales of new energy vehicles reached 4.6 million units. At the same time, after ranking among the global top 10 auto groups for three consecutive years, BYD took another step forward in 2025, rising to fifth place globally.

The overseas market is also a highlight in the financial report. In 2025, BYD’s full-year overseas exports reached 1.05 million units, up about 140% year over year, and it continued to remain firmly among the leading Chinese automakers in new energy vehicle exports. The corresponding overseas revenue reached 310.7 billion yuan, accounting for about 38.6% of total revenue. From improving sales volume and revenue to increasing the share, internationalization has gradually become an important pillar supporting BYD’s performance.

But the impressive scale did not bring profit release to a similar degree. In 2025, BYD’s net profit attributable to shareholders of the parent company was 32.62 billion yuan, down from 40.25 billion yuan in 2024, a year-over-year decline of about 18.9%. Gross profit was 142.66 billion yuan, down about 5.6% year over year. The overall gross profit margin narrowed from 19% to 18%, reaching the lowest level in nearly five years. Specifically for the auto business, in 2025 BYD’s auto business revenue was 6486.46 billion yuan, up 5.06% year over year, but the auto business gross profit margin fell from 24.01% in 2024 to 20.49%.

BYD overseas (part of) market distribution/map: official brand

For a company like BYD, which still maintains high sales volume, the decline on the profit side is more worth watching than a simple change in growth rate. It shows that in 2025, industry competition had become so fierce that even leading companies could not easily hold on to profit margins while expanding scale.

With profit under pressure, price wars are of course the most direct cause. But if you attribute the problem only to “price cuts,” your understanding of this financial report is not complete enough.

On one hand, BYD is still continuously increasing its R&D and technology investment. In 2025, the company’s R&D expenditure reached 63.4 billion yuan, setting a historical high, accounting for about 7.9% of revenue. By the end of the reporting period, BYD’s engineering team size had exceeded 120,000. Just before the annual report was released, BYD also disclosed its second-generation blade batteries and flash-charging technology externally: at room temperature, charging from 10% to 70% takes 5 minutes, while charging from 10% to 97% takes 9 minutes, further pushing energy replenishment efficiency to new heights. For a company that wants to maintain its industry-leading position, R&D cannot stop— it even needs to be further increased. Such investment will inevitably create continued pressure on profits in the short term.

BYD “Jinan” model/map: official brand

On the other hand, BYD’s premiumization and globalization efforts are also still in a stage of ongoing investment. In 2025, the combined annual sales of BYD’s three premium brands—Yangwang, Denza, and Fangchengbao—were close to 400,000 units. Their share in the group’s passenger vehicle sales continued to increase, indicating that BYD’s upward brand path is moving forward. But from building brand recognition to forming stable profitability, premium brands are, by nature, a long-term campaign. Higher costs are required for R&D, channels, marketing, and user operations. The same logic applies to overseas markets. Breaking the one-million export mark is certainly impressive, but as localization, channel development, after-sales systems, and compliance costs continue to rise, going overseas is no longer simply about “selling cars.”

And judging from the sales performance in the first quarter of 2026, the pressure BYD faces is continuing as well. In March, new energy vehicle sales were 300.2 thousand units, down 20.46% year over year. From January to March, cumulative new energy vehicle sales were 700.5 thousand units, down 30.01% year over year. Although BYD is still firmly holding the top spot in China’s new energy vehicle sales, in the context of profit pressure and intensifying price competition, at least these figures indicate that the start of 2026 will not be easy.

More worth paying attention to is actually the industry change reflected in this financial report.

In 2025, competition in China’s new energy vehicle market intensified further, and price became the most direct competitive tool. The wave of price cuts ran through almost the entire year, with coverage expanding from mainstream markets in the 100,000-yuan range to even higher-priced segments. According to data from the Passenger Car Association, in 2025 there were more than 200 discounted new energy vehicle models in the domestic market, with an average discount of about 12%, and some models saw discounts exceeding 30%.

In such an environment, BYD is both one of the companies most capable of initiating price wars and one of the companies most required to bear the consequences after a price war. It has the strongest vertical integration capability in the industry, the most mature supply-chain system, and very strong cost-control ability. Even so, the gross profit margin of the auto business still fell significantly—this alone is enough to show that the industry’s profit space is being squeezed rapidly.

BYD Fangchengbao Ti7: official brand

Another clearer signal is that the era of high growth is coming to an end. In 2025, BYD’s full-year cumulative sales increased 7.73% year over year. This number is still not low today, but compared with the past two years, the change is very obvious: in 2024, BYD’s sales growth rate was 34.2%, and in 2023 it exceeded 60%. The sharp slowdown in growth reflects that China’s new energy vehicle market itself has shifted from high-speed expansion to stock competition under high penetration. As domestic new energy vehicle penetration surpasses 50%, future competition will become increasingly direct—everyone will be fighting for market share, profits, and users in the same mature market.

Previously, BYD’s biggest advantage was scale expansion and cost advantage. Next, it will face another set of more complex questions: how to continue to protect profit margins in a high-penetration market, how to ensure that premium brands truly deliver higher value contributions, how to shift overseas business from “export growth” to “global operations,” and how to maintain leadership in new competitive dimensions such as smart features, batteries, and energy replenishment systems.

In fact, BYD is still the strongest leading player in China’s new energy vehicle industry, and this has not changed because of the decline in profits. But this financial report makes one thing very clear: when the industry enters deep water, even leading companies find it hard to simply rely on volume expansion to pass through the cycle with ease. BYD is still racing forward, but the next race is no longer only about who can run faster—it’s about who can run more steadily and earn profits for a longer time.

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