BYD posts steeper‑than‑expected profit drop in Q4 2025
BYD, the world’s largest electric‑vehicle maker, reported a sharper‑than‑expected decline in net profit in the fourth quarter of 2025, as intense price competition and tighter regulations in China have trimmed margins for a third consecutive quarter. The company disclosed the figures on Friday as its board met to approve audited annual results and decide on a final dividend.
The Q4 shortfall prolongs a weakening streak that began mid‑2025, when BYD’s net profit fell 32.6 percent year‑on‑year in the third quarter to 7.82 billion yuan, its steepest quarterly drop in more than four years. Analysts surveyed by Visible Alpha had forecast a net profit of about 12 billion yuan for Q4, with revenue expected to decline roughly 10.7 percent year‑on‑year to 245.5 billion yuan. The weaker‑than‑expected result highlights how growing competition from rivals such as Geely and Leapmotor continues to squeeze margins.
Challenges on the domestic market have intensified heading into 2026. Combined sales in January and February fell by about 36 percent year‑on‑year, as a 5 percent purchase tax on new‑energy vehicles reinstated at the end of 2025 created a demand lull after consumers rushed to buy ahead of the measure. Competitors including Xiaomi have also gained ground, with Xiaomi’s YU7 SUV outselling Tesla’s Model Y in January, according to CNBC.
Profit margins remain under pressure. BYD’s gross margin stood at 17.61 percent in the third quarter, down by more than six percentage points from the same period last year. The company’s vertical integration, which covers about 80 percent of key components in‑house, has helped buffer some of the impact, but analysts at MarketWatch note that investors will closely scrutinize whether cost discipline held in the final quarter.
The latest results coincide with the Wednesday launch of BYD’s Song Ultra EV, a mid‑size electric SUV priced from 151,900 yuan, well below its pre‑launch price of 155,000 yuan and notably cheaper than rivals such as the Tesla Model Y. The vehicle features BYD’s second‑generation Blade battery and 800‑volt ultra‑fast charging technology, which can add more than 300 kilometers of range in about five minutes. The company has already recorded more than 21,500 pre‑orders within 20 days.
BYD is increasingly turning to international markets to offset weakness at home. In February, exports exceeded domestic sales for the first time, calculations from CNBC show. The automaker is building plants in Brazil, Thailand, Hungary and Turkey, and is considering setting up a production facility in Canada, where vice‑president Stella Li is evaluating potential sites. Shareholders are now watching whether these heavy international investments, alongside the dividend decision announced Friday, will yield long‑term returns or keep weighing on margins in the short term.
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