BYD Posts 33% 3Q25 Profit Decline; Rivals Gain Ground

BYD reported a 33% drop in 3Q25 profits, highlighting mounting pressure from domestic competition and regulatory scrutiny over aggressive pricing in China’s electric vehicle market. The Shenzhen-based automaker posted net income of US$1.1 billion, while total revenue fell 3% to US$1.266 billion, below analysts’ estimates of US$1.402 billion.

The company delivered 1.15 million new energy vehicles—including fully electric and plug-in hybrid models—during the quarter, a 1.8% decline from the same period in 2024. In contrast, competitors Geely and Chongqing Changan posted third-quarter sales gains of 96% and 84%, respectively.

BYD has been caught in an extended domestic price war, prompting regulatory attention over concerns that intense competition could undermine product quality. In response, the company cut its 2025 sales target by 16% to 4.6 million units. In September, BYD lost its position as China’s top-selling automaker to state-owned SAIC Motor following its first year-over-year sales decline in 18 months, according to the China Association of Automobile Manufacturers.

The average discount on EVs in China reached a record 17.4% in June, according to a JPMorgan report covering 40 domestic and foreign brands and 1,000 variants. The figure fell slightly to 16.7% in July and has remained relatively stable since. Total vehicle output—including buses, trucks, and passenger cars—could reach 33 million units this year, compared with an estimated production capacity of 50 million, according to Nick Lai, head of car research for Asia-Pacific, JPMorgan.

Analysts attribute the slowdown partly to BYD’s efforts to reduce inventory ahead of its 2026 model launches. Citigroup noted that both absolute and relative inventory measures fell month over month in September. Jeff Chung, an analyst covering BYD, said that with lower inventory, the company “could regain market attractiveness through relatively stable margins and cost advantages,” particularly if its export portfolio strengthens in the first quarter of 2026.

International sales surged 160% year over year in 3Q25, driven by demand in Europe and Latin America. BYD is also increasing investment in research and development investments to boost production of higher-end, higher-margin vehicles under its luxury brands Yangwang and Fangchengbao next year.

The company expects exports to account for about 20% of total sales in 2025, up from roughly 10% in 2024. Lai noted that Chinese EV makers could achieve profit margins of US$129.80 per unit abroad, roughly four times higher than in the domestic market, due to stronger overseas pricing. Last month, BYD recorded sales growth in Europe after launching additional models and expanding its sales network, narrowing the gap with market leader Tesla.

Despite government calls to end unsustainable price wars across the automotive sector, analysts say regulatory efforts have had limited impact so far.