Chinese electric‐vehicle powerhouse BYD reported that its net profit for Q3 2025 dropped to ¥7.8 billion (about US $1.10 billion), down from around ¥11.6 billion a year earlier — a drop of roughly 32.6-33%.
At the same time, revenue declined to about ¥195 billion, down about 3.1% year-on-year — the first time in more than five years that the company’s revenue has fallen.
Key Reasons Behind the Decline
1. Intensified domestic competition
BYD’s home market is under pressure: competitors like Geely and Leapmotor are aggressively expanding in the budget EV segment, eroding BYD’s market share (which fell to 14 % in China in September from about 18 % a year earlier).
2. Margin erosion from pricing and cost pressures
Lower margins were reported: gross margin fell from ~21.9 % a year earlier to ~17.6 % this quarter, reflecting the shift in product mix and pricing pressure.
3. Regulatory and subsidy shifts
The Chinese regulatory environment has tightened on aggressive discounting and non-standard practices in the EV industry, which has disrupted BYD’s previous growth model.
4. Revenue drop despite size
The revenue drop is notable given BYD’s scale: falling sales or weaker sales mix contribute to the loss.
What This Means for BYD & the EV Market
- Short term pain for BYD: The result signals that even market leaders are not immune to saturation and competition in China’s EV market.
- Shift in strategy needed: BYD will likely accelerate its overseas push, premium models, perhaps design refreshes, to offset domestic pressure.
- Investor caution: A major decline in profit and revenue may shake investor confidence; BYD’s near-term growth story is under question.
- Industry signal: The result is a warning for the broader EV sector in China — scale alone may no longer guarantee growth or profitability.
Outlook & Next Steps
- BYD has trimmed its 2025 vehicle sales target by about 16 %, to ~4.6 million units, signaling moderation in expectations.
- It aims to double exports of EVs and plug-in hybrids in 2024/25 and push further into overseas markets (Europe, Japan, etc). Financial Times
- Watch for: design refreshes (BYD’s “dragon-face” styling has been in use for years), new premium models, cost control, and how the export ramp-up translates into profits.
Final Thoughts
The headline “BYD profit falls 33%” is more than just a number — it reflects a structural shift in China’s EV market dynamics. For BYD, maintaining leadership will require not just volume, but product differentiation, global diversification and margin discipline.
For the market, it signals that the growth phase of Chinese EV makers may be entering a more challenging era.
