In a significant downturn for the world’s top electric vehicle manufacturer, BYD reported its fifth consecutive month of declining sales on February 1, 2026.
The Shenzhen-based giant sold 210,051 new energy vehicles (NEVs) in January 2026, representing a sharp 30.1% year-on-year drop from the 300,538 units sold in January 2025. This downward trend, which began in late 2025, underscores a deepening crisis in China’s domestic EV market.
1. The “Post-Subsidy” Hangover
The primary driver for the January collapse was the expiration of major Chinese EV subsidies in December 2025.
- Pull-Forward Demand: Buyers rushed to finalize purchases in Q4 2025 to lock in government incentives, leaving a massive “demand vacuum” in early 2026.
- Mass-Market Vulnerability: BYD’s budget-friendly Dynasty and Ocean series were hit hardest, as these price-sensitive models relied most heavily on state support.
- Revised Tax Burden: A resumption of purchase taxes on NEVs has further cooled the appetite for new cars among middle-class Chinese consumers.
2. The Brutal Domestic Price War
Despite being the global volume leader in 2025, BYD is facing unprecedented pressure at home:
- Market Saturation: With NEVs now making up nearly 60% of new car sales in China, the market has reached a saturation point where growth is no longer guaranteed.
- Rising Rivals: Tech-backed newcomers like Xiaomi and Huawei-backed brands are siphoning off market share, with some reporting growth exceeding 90% while legacy leaders stumble.
- The “Knife Fight”: Analysts at UBS suggest the current price war could last for years, forcing BYD to prioritize margins over volume by pushing its premium Denza and Yangwang brands.
3. Pivoting to “Global Relief”
While domestic sales are in a tailspin, BYD’s export numbers remain a solitary bright spot in the balance sheet.
- Export Surge: In January 2026, BYD exported 100,482 vehicles—nearly half of its total monthly output and a 51% increase year-on-year.
- Strategic Rebalancing: The company has revised its 2026 overseas shipment target to 1.3 million vehicles (down from a previous 1.6 million goal) to focus on higher-margin European and Southeast Asian markets.
- Regional Strongholds: BYD now dominates new car sales in markets like Singapore (over 20% share) and is aggressively expanding in Australia, Brazil, and Thailand.
| Metric | Jan 2026 | Jan 2025 | Change (YoY) |
| Total NEV Sales | 210,051 | 300,538 | ↓ 30.1% |
| Export Volume | 100,482 | 66,336 | ↑ 51.5% |
| Production Units | 195,500 | 275,700 | ↓ 29.1% |
4. Future Outlook: Can BYD Bounce Back?
The market’s reaction has been swift, with BYD shares hitting a one-year low on the Hong Kong Stock Exchange following the news.
- New Model Cycle: BYD is betting on its “Linghui” sub-brand and long-range fifth-generation DM-i hybrids to spark interest in Q2 2026.
- Manufacturing Localization: To bypass stiff EU tariffs, BYD is fast-tracking plants in Hungary, Turkey, and Indonesia, with full production expected by late 2026.
- Target 2026: Despite the rough start, analysts still expect BYD to sell 5 million units annually, provided its international expansion can offset the cooling dragon at home.
Conclusion: A Structural Reset
BYD’s five-month decline is not a sign of technological failure, but a structural reset of the Chinese auto industry. The era of “easy growth” fueled by subsidies is over. To maintain its crown, BYD must successfully transition from being a Chinese manufacturer to a truly global automotive superpower. The next six months will be critical: if the decline continues into the second quarter, the “Toyota of EVs” may need to rethink its high-volume strategy entirely.
