BYD records weakest sales growth in China in 5 years

BYD has posted its slowest annual sales growth in five years, underlining the growing pressures facing China’s largest electric vehicle maker in its home market as competition intensifies and its technological lead narrows.

According to a Reuters report, sales growth at BYD slowed to 7.73 per cent in 2025, the weakest pace in half a decade. Total sales rose to 4.6 million units, meeting a revised target after the company cut its original goal by 16 per cent as domestic demand weakened from July onward.

The slowdown sharpened toward year-end. BYD’s total sales fell 18.3 per cent year-on-year in December, extending declines for a fourth consecutive month and marking its steepest monthly drop in nearly two years, according to a stock filing on Thursday.

Domestic market challenges

BYD’s domestic performance was hit by intensifying competition, particularly in the budget segment, where rivals such as Geely and Leapmotor have gained share. Chairman Wang Chuanfu said at an investor conference in December that the company’s technological leadership had weakened, Chinese media outlet Southern Metropolis Daily reported.

Wang said BYD plans to roll out major innovations in 2026, without giving details. Recent measures, including offering advanced driver-assistance features on models priced as low as $9,555 and launching vehicles with ultra-fast charging technology, have so far failed to arrest the slide in market share.

Price war fallout

In May, BYD cut prices across more than 20 models, triggering a selloff in Chinese auto stocks and prompting a public warning from Great Wall Motor’s chairman that the industry had become “unhealthy". BYD later slowed production and delayed capacity expansion plans, Reuters reported in June.

In November, Reuters reported that BYD told some suppliers it planned to stop using in-house financial notes for payments, signalling a shift away from a practice that helped fuel its rapid growth but had drawn criticism from parts makers.

Overseas growth offsets weakness at home

BYD has increasingly relied on overseas markets to cushion the domestic slowdown. Sales outside China jumped 150.7 per cent to a record 1,046,083 units in 2025. The company has said it aims to sell up to 1.6 million vehicles abroad in 2026, though it has not disclosed an overall sales target.

With EV sales rising 27.9 per cent to 2.26 million units, BYD is poised to overtake Tesla in annual electric vehicle sales for the first time. Tesla is expected to deliver about 1.64 million vehicles in 2025, down 8.3 per cent year-on-year, according to consensus estimates.

Tesla’s models remain priced above BYD’s Ocean and Dynasty series, while chief executive Elon Musk has shifted focus away from an affordable mass-market EV towards artificial intelligence and robotaxi development, a contrast to BYD’s volume-led global expansion strategy.

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