Stock Markets April 28, 2026 07:31 AM

BYD Reports Sharpest Quarterly Profit Drop Since 2020 as Domestic Sales Weaken

First-quarter earnings and revenue slide amid softer China demand; overseas expansion and technology investments highlighted as countermeasures

By Avery Klein
BYD Reports Sharpest Quarterly Profit Drop Since 2020 as Domestic Sales Weaken

BYD's first-quarter net profit plunged 55.4% year-on-year to 4.1 billion yuan, marking its steepest quarterly decline since 2020, while revenue fell 11.8% to 150.2 billion yuan. The world-leading electric vehicle maker faces slowing domestic sales amid intensified competition and reduced trade-in subsidies for entry-level EVs and plug-in hybrids, and is shifting emphasis to overseas markets and faster charging technology to regain momentum.

Key Points

  • BYD's first-quarter net profit fell 55.4% year-on-year to 4.1 billion yuan and revenue dropped 11.8% to 150.2 billion yuan, marking the steepest quarterly profit decline since 2020.
  • Domestic sales have cooled, with overall sales down for a seventh straight month in March, amid reduced trade-in subsidies for entry-level EVs and heightened competition from rivals such as Geely and Leapmotor - impacting the auto sector and consumer EV demand.
  • BYD is prioritizing overseas expansion, targeting 1.5 million overseas vehicle sales by 2026 or higher, while investing in ultra-fast charging technology and introducing higher-end products like the Datang SUV to challenge premium brands.

BEIJING, April 28 - Chinese electric vehicle manufacturer BYD reported a marked downturn in its first-quarter results, disclosing a 55.4% year-on-year fall in net profit to 4.1 billion yuan. The company said first-quarter revenue declined 11.8% to 150.2 billion yuan, extending a contraction in top-line performance into a third consecutive quarter.

The rate of profit decline is the steepest BYD has registered since 2020, and it follows an already-sharp 38.2% drop recorded in the fourth quarter. The results underscore mounting pressure on the automaker as domestic demand softens.

BYD's product strategy historically emphasizes lower-priced models, many priced under 150,000 yuan, a segment that has been directly affected as China trims trade-in subsidies for entry-level electric vehicles and plug-in hybrids. At the same time, competition at home has intensified from rivals such as Geely and Leapmotor, further eroding BYD's near-term domestic performance.

Sales trends reflect that weakness: the company reported an overall domestic sales decline for a seventh consecutive month in March, even as shipments abroad continued to grow strongly. In response to the prolonged domestic slump, BYD is stepping up efforts overseas, stressing advanced technology and local manufacturing as pillars of its international push.

Management has expressed confidence in meeting its 2026 overseas sales objective of 1.5 million vehicles or potentially exceeding that figure. The company noted that achieving the 1.5 million target would imply growth of more than 40% from 2025. However, BYD has not published an overall company-wide sales target.

Outside analysts cited in company commentary provided specific forecasts for exports and total sales. Vincent Sun of Morningstar projected BYD's exports would increase by 25% to 30% in the current year, while total vehicle sales were expected to rise by about 12%.

Seeking to shore up its competitive position, BYD is intensifying development of ultra-fast charging technology, positioning the capability as a means to attract drivers who remain loyal to petrol-powered cars by reducing charging-time concerns.

On the product front, BYD launched pre-sales for the Datang full-size electric SUV at the Beijing auto show on Friday, moving further into higher-end segments and stepping up competition with European premium brands.

For reference, the exchange rate used in company disclosures equated $1 to 6.8359 Chinese yuan renminbi.

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Risks

  • Continued weakness in domestic vehicle sales as China scales back trade-in subsidies for entry-level electric cars and plug-in hybrids - a risk for the domestic auto sector and BYD's near-term revenue.
  • Intensifying competition from domestic rivals including Geely and Leapmotor, which could further pressure BYD's market share and margins in China's EV market.
  • Execution risk associated with shifting growth overseas and accelerating technology investments (ultra-fast charging and higher-end product launches); failure to achieve projected export growth or to win premium buyers could constrain recovery.

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