Source Credit : Portfolio Prints
Chinese automaker BYD reported record annual revenue of $116 billion on Friday, surpassing Tesla for the first time. However, the company also posted its first profit decline since 2021, highlighting the strain of intensifying competition in the electric vehicle (EV) market.
BYD, the world’s largest EV manufacturer, has been aggressively expanding into international markets such as Latin America and Europe, where profit margins tend to be higher than in China. The company is also betting on technological innovation to drive growth, recently unveiling a next-generation fast-charging battery capable of reaching near-full charge in just nine minutes.
Despite these efforts, analysts warn of a challenging year ahead. Competition in China’s EV market remains exceptionally fierce, while domestic demand has weakened. Over the past six months, BYD has reported consecutive declines in sales, with January–February sales dropping 36% year-on-year to 400,241 units. Overseas growth has not been sufficient to offset the slowdown at home.
In 2025, BYD sold 2.26 million electric vehicles—up 28% year-on-year—overtaking Tesla, which delivered 1.64 million vehicles, a 9% decline. The company’s revenue rose 3.5% to 804 billion yuan ($116 billion), exceeding Tesla’s $94.8 billion in annual revenue.
However, net profit fell 19% to 32.6 billion yuan ($4.7 billion), marking its first annual decline in four years. A prolonged price war in China, the world’s largest auto market, has significantly pressured margins, while competitors such as Geely Auto continue to gain ground.
BYD chairman Wang Chuan-fu acknowledged the intensity of the market environment, describing the EV industry as being in a “brutal knockout stage.” At the same time, reduced government subsidies for EV purchases have added further pressure on automakers.
Still, rising global oil prices—partly driven by geopolitical tensions such as the Iran conflict—are expected to renew interest in electric vehicles, potentially benefiting companies like BYD in both domestic and international markets.
The company’s Hong Kong-listed shares have fallen more than 20% over the past year, although they have shown signs of recovery in March.
Looking ahead, analysts believe technological advancement will be critical for BYD to regain momentum. Alongside its new battery technology, the company has launched updated models such as the Datang SUV, which could help restore its domestic market share through innovation.
International expansion remains a key pillar of BYD’s strategy. The company is targeting overseas sales of approximately 1.3 million vehicles in 2026, up from about 1.05 million last year. Continued investment in global manufacturing facilities is expected to strengthen its position and improve profitability abroad.
