BYD’s Q3 net profit fell 33% to 7.82B yuan ($1.10B), missing market expectations

BYD reported a sharp drop in earnings for the third quarter after facing heavy price competition and weaker demand in China.

The company said net profit for the period came in at 7.82 billion yuan, or $1.10 billion, which is down 33% from the same quarter last year. Analysts had been expecting 9.02 billion yuan, according to Visible Alpha.

Revenue also slipped, falling 3.05% to 194.98 billion yuan, compared with market expectations of 215.30 billion yuan.

The automaker has been trying to shift its image from a low-cost EV brand into a recognized high-quality manufacturer, but the pressure inside its home market is proving difficult to shake.

Sales in China have weakened as the government pushed automakers to stop the ongoing price war in the country’s massive auto market. Demand also cooled at home.

BYD’s domestic sales fell 2.1% in the third quarter, marking its first quarterly drop since 2020. Analysts said the company may be close to a bottom and could see stronger earnings in the fourth quarter, though that remains uncertain.

Over the first nine months of the year, net profit slipped to 23.33 billion yuan from 25.24 billion yuan. Revenue, however, rose to 566.27 billion yuan from 502.25 billion yuan in the same period last year.

BYD pushes expansion overseas

The company has been focusing aggressively on overseas markets to offset slower growth at home.

New-car registrations for BYD vehicles in Europe almost quintupled to 24,963 units in September, according to data from the European Automobile Manufacturers’ Association.

The company also introduced a battery-powered mini kei car in Japan this week, built specifically for local consumers in a market where hybrid and domestic brands still hold strong control.

Research spending has also increased.BYD reported that its research and development costs jumped 31% to 43.75 billion yuan in the first nine months of the year.

The company said the increase came from higher employee compensation and the cost of materials needed to advance new technologies, including autonomous driving features aimed at moving the company further into the premium segment.

At the same time, the company’s Hong Kong-listed shares are on track for their longest run of monthly declines since 2018. Ahead of the earnings release, the stock had already fallen 32% from its peak in May, cutting more than $45 billion in market value.

Trading in BYD options has also intensified, with the combined number of puts and calls outstanding climbing past 650,000 contracts, close to a previous record.

Competition with Tesla and strategy in Europe

Competition remains heavy, especially with Tesla. Tesla’s European sales dropped 10.5% year-on-year in September to 39,837 units delivered to customers. But analysts say the trend shows how BYD’s global expansion is taking shape.

“The numbers further proved that BYD’s internationalisation strategy is working well,” said Gao Shen, an independent analyst in Shanghai. He added that the company still needs stronger sales outside China to show its global manufacturing strength.

The company plans to double its European showrooms to 2,000 by 2026 and to build a local supply chain to support production in the region, according to executive vice-president Stella Li, who spoke during the IAA Mobility conference in Munich last month.

BYD now sells 13 models in Europe, compared with six two years ago, and intends for all European-sold vehicles to be locally made by 2028.

Data from ACEA showed that new BYD car sales in Europe reached 120,859 units in the first nine months of 2025, which is a 300% increase. By comparison, Tesla’s deliveries in the region fell 28.5% to 173,694 units during the same period.

BYD sells both pure-electric and plug-in hybrid vehicles in Europe, while Tesla sells only pure-electric models.

Exports are expected to make up about 20% of BYD’s global sales this year, compared with 10% last year. Meanwhile, overall car sales in mainland China may slump 3% to 5% in 2026 if the government ends tax incentives and purchase subsidies, according to JPMorgan.

Nick Lai, head of auto research in Asia-Pacific at the bank, said Chinese EV makers could earn profit margins of 20,000 yuan per vehicle abroad, which is four times what they earn in China, since vehicle prices overseas are higher.

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