BYD Reports First Profit Decline in Over Three Years as Price Wars Weigh on Growth
Chinese electric vehicle (EV) giant BYD reported a quarterly profit drop for the first time in more than three years, as its expansion slowed amid government pressure to curb industry-wide price wars.
Net profit for the world’s largest EV manufacturer came in at 6.4 billion yuan ($894.7 million) in the second quarter, down 29.9% year-on-year. This follows a sharp 100.4% rise in profit during the first quarter. Revenue, however, increased 14% to 200.9 billion yuan for the three months ending June 30.
For the first half of 2025, BYD posted a 13.8% rise in profit on revenue growth of 23.3%.
As Tesla’s biggest Chinese competitor, BYD has faced pressure after authorities urged automakers to halt aggressive pricing that has eroded margins across the sector. The company has set an ambitious target of selling 5.5 million cars worldwide this year but has delivered 2.49 million vehicles in the first seven months, reaching only 45% of its goal.
Analysts have expressed doubts over BYD meeting its full-year targets. Third Bridge’s Rosalie Chen described the outlook as “pessimistic,” while Nomura forecasts sales between 5 million and 5.2 million units for 2025.
BYD, which relies on China for nearly 80% of its sales, saw domestic vehicle sales fall for a third consecutive month in July, while production declined for the first time in 17 months. Reports also suggest the company has slowed output and delayed new factory expansions.
The automaker joined industry peers in pledging to pay suppliers within 60 days, following government orders to improve payment practices and end destructive price competition. As a result, analysts have turned their focus to working capital pressures.
BYD’s working capital deficit widened to 122.7 billion yuan at the end of June, compared with 95.8 billion yuan in March. It was 125.4 billion yuan at the end of 2024. The company’s debt-to-asset ratio also increased to 71.1% from 70.7% in the previous quarter.
