BYD Stock: Third Quarter Profit Drops 33% as Price War Weighs on Earnings

TLDR

• BYD shares fell over 4% to HK$97.50, their lowest level since early February
• Third quarter profit declined 32.6% year-over-year to 7.8 billion yuan ($1.10 billion)
• October 2025 vehicle sales dropped 12% from the prior year to 441,706 vehicles
• Company cut its 2025 sales target by 16% to 4.6 million vehicles
• Revenue fell 3.1% in Q3 to 195 billion yuan, the first decline in over five years

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BYD posted its worst quarterly profit decline in more than four years. The Chinese electric vehicle maker reported a 32.6% year-over-year drop in third quarter earnings to 7.8 billion yuan.

Hong Kong-listed shares fell more than 4% on Friday to HK$97.50. This marked their weakest level since early February.

BYD COMPANY (1211.HK)

Revenue for the quarter declined 3.1% to 195 billion yuan. This represents the first revenue decline in over five years for the company.

The earnings miss comes as BYD faces intense competition in China’s crowded EV market. The company is locked in a price war with domestic rivals including Geely Automobile Holdings and Zhejiang Leapmotor.

BYD’s budget car segments have taken the biggest hit. These lower-priced vehicles carry slimmer profit margins and face the most direct competition.

The price war has steadily eroded the company’s profitability. Multiple Chinese EV makers are slashing prices to capture market share in the world’s largest electric vehicle market.

October Sales Continue Downward Trend

The company’s struggles extended into October 2025. BYD sold 441,706 vehicles during the month, down 12% from October 2024’s 502,675 units.

The sales figure was shared on Weibo by a BYD executive responsible for marketing and public relations. The decline reflects ongoing pressure from competitors in the domestic market.

BYD has responded by cutting its 2025 sales target. The company reduced its full-year goal by 16% to 4.6 million vehicles.

Despite the domestic challenges, BYD maintains ambitious export targets. The automaker has been gaining ground in Europe and outsold Tesla in several months this year.

Regulatory Headwinds Add to Challenges

China’s regulatory environment poses additional hurdles for BYD. The country’s latest five-year plan eliminated a key subsidy program for electric vehicles.

The subsidy removal could cool demand in the Chinese EV market over the coming years. This adds another layer of difficulty for manufacturers already battling thin margins.

Other Chinese EV stocks also declined on Friday. Li Auto fell between 0.3% and 1.6%, while NIO and Xpeng saw similar drops.

Leapmotor shares shed 0.8% on the day. The broader selloff reflects investor concerns about the entire Chinese EV sector.

BYD faces competition not just from traditional rivals but from newer entrants. The Chinese market has become increasingly saturated with EV manufacturers.

The company’s budget segments are particularly vulnerable. Competitors can easily undercut prices in this category where brand loyalty is less established.

BYD reported third quarter earnings on Thursday and October sales data on Saturday. The company sold 502,675 vehicles in October 2024 compared to 441,706 in October 2025.

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