BYD's True Cards Are Revealed

Exports are surging, but the domestic market is leaking.

Sales of 1.8085 million in half a year! This would be enough for any Chinese automaker to stand head and shoulders above the rest.

However, for BYD today, behind this report card is not a victory lap, but a touch of anxiety.

Just like all Chinese listed automakers, overseas performance is soaring, while the domestic market faces harsh conditions; technology keeps breaking through, but profits are bleeding non-stop.

With the "single dominance" pattern broken, how can this technology-focused new energy vehicle giant turn the tide?

From an absolute sales figure perspective, BYD's single-month sales of 403,500 in June make it the only automaker to break the 400,000-vehicle mark that month. Within the Chinese independent brand camp, it still firmly holds the top spot.

In the first half of this year, with sales of 1.8085 million, BYD continued to secure the champion title among independent brands; however, the luster of this "champion" has slightly faded. With a significant gap of 236,800 vehicles, BYD lost to SAIC Group and failed to retain the sales crown among Chinese listed automakers.

More critically, the signal of being overtaken by SAIC Group is far more alarming than the numbers themselves. It means BYD no longer possesses a "crushing" competitive barrier; some rivals have already found ways to crack it.

Not only that, but the footsteps of followers are constantly drawing closer. Geely and Chery achieved sales of 1.423 million and 1.2751 million respectively in the first half of the year, both maintaining positive growth. Rivals that BYD once left so far behind they couldn't even see the taillights are now appearing in its rearview mirror, closer than ever.

It cannot be ignored that while others are chasing, BYD is merely slowing the rate of decline.

Among the 18 Chinese automakers registered in "AutosKline" statistics, BYD's 15.72% year-on-year decline was only better than FAW Group, Changan Automobile, and XPeng Group.

Starting this year, the pattern of BYD's single dominance has been broken, replaced by the new normal of "fierce competition among rivals".

More worrying is the domestic market. In the first half of this year, BYD's domestic sales were 1.0191 million, a 39% decrease year-on-year.

Wang Chuanfu stated at the shareholder meeting in December last year, "Declining technology leadership and industry homogeneity." These few words summed up BYD's passive situation in the domestic market.

As Wang Chuanfu said, such rivals as Geely, Chery, and even SAIC Group continue to launch competitor products against BYD at the product level, whether pure electric or plug-in hybrid, almost completely erasing BYD's first-mover advantage.

However, it needs to be clarified that this 39% decline is not entirely "blood loss". The same period of 2025 saw an explosive growth in new energy vehicle penetration rates, which set a huge base. BYD is also actively undergoing structural adjustments, compressing low-profit ride-hailing and low-price orders, and tilting capacity towards high-end models and overseas markets.

Therefore, BYD's passive situation in the domestic market also has components of active contraction.

However, this passivity is now transmitting from "sales" to "profits".

On April 28, BYD disclosed its 2026 Q1 report: Operating revenue was 150.225 billion yuan, a 11.82% year-on-year decline; Net profit attributable to the parent company was 4.085 billion yuan, plummeting 55.38% year-on-year; Deducted non-recurring net profit was 4.148 billion yuan, a 49.24% year-on-year decline.

Behind the profit being cut in half, foreign exchange losses were also a fatal "black swan". First-quarter financial expenses reached 2.1 billion yuan, while the same period last year saw 1.908 billion yuan in foreign exchange gains. One step forward, one step back, the exchange factor alone swallowed a scissors difference of about 4 billion yuan.

In its globalization process, BYD holds a large USD exposure. A weakening dollar caused this technology-focused automaker to pay a heavy price on the financial battlefield.

What is the concept of 4 billion yuan? BYD's full-year net profit in 2025 was about 30 billion yuan; one quarter evaporated profits equivalent to over 13% of the whole year.

Of course, a weakening dollar also reduced the import costs of some raw materials (such as lithium mines, chips), but this dividend is far from enough to offset the direct impact of foreign exchange on the income statement.

At the same time, the decline in revenue and profits is also directly related to the domestic price war and falling sales.

So, where does its growth momentum come from?

The answer, like almost all Chinese listed automakers, still points overseas.

In the first half of this year, BYD's cumulative overseas sales reached 789,400, a year-on-year surge of 67.92%; single-month exports in June were 174,900, a year-on-year explosion of 95%, setting a new historical high.

Meanwhile, the proportion of overseas sales in total sales has broken 43%, and the completion rate of the 1.5 million overseas target for the year has reached 52.62%.

"AutosKline" believes that against the background of overall sales decline, the strong growth in the overseas market is almost the only support for listed automakers' confidence in the capital market.

From the start of production in Thailand and Uzbekistan factories, to the first car rolling off the line in Brazil, to the confirmation that the Hungary factory will start assembly in the fourth quarter, BYD is completing the qualitative change from product export to industry export.

Bank of Communications International even stated directly that "the overseas market remains one of the most certain sources of growth for BYD".

However, there is an inescapable problem. BYD's 789,400 overseas incremental volume in half a year, minus the approximately 670,000 domestic decline year-on-year, results in a net increase of only about 120,000 vehicles.

The overseas market is indeed galloping, but more so to fill the gap left by falling domestic sales. This is BYD's current most realistic situation.

Furthermore, behind the high growth overseas lie hidden worries. New regulations in Malaysia have stalled local factories, European tariff barriers remain, and the huge foreign exchange losses in the first quarter exactly exposed BYD's financial risk management shortcomings in its global layout.

These issues remind us: is the overseas market the cure or the new lesion? The answer depends on whether BYD can win on both battlefields simultaneously.

However, even if there are many uncertainties overseas, BYD still has another card in its hand—technology.

In March, BYD officially launched the second-generation Blade Battery and Flash Charging technology. Under normal temperature, charging from 10% to 70% takes only 5 minutes, and from 10% to 97% takes only 9 minutes. This is undoubtedly one of the most impactful technology breakthroughs in the new energy vehicle field in 2026.

With the release of the new batteries and flash charging technology, BYD's orders also exploded in growth. On the launch day of Datang EV, cumulative orders broke 150,000.

Problems emerged as well: capacity cannot keep up.

Wang Chuanfu admitted at the shareholder meeting: "This year, BYD's sales will depend on battery production volume."

Currently, the production capacity of the second-generation Blade Battery is climbing by 20,000 to 30,000 units per month, but distant water cannot solve near fire. Deliveries of popular models need to wait several months, and a large number of orders face the risk of being lost while waiting.

Technology leadership but losing to capacity ramp-up, this is a happy dilemma. Even for BYD, it is inevitable to fall into a temporary stalemate in supply chain management and mass production rhythm control. The time gap between technology launch and capacity release has discounted the first-mover advantage.

Facing triple pressure from sales, profits, and capacity, BYD's choice is, rather than passively taking a beating, to actively transform.

Since mid-June, BYD has launched the largest-scale whole-vehicle business organizational transformation since its inception.

The four brands—Dynasty, Ocean, Denza, and Fang Cheng Bao—are fully implementing independent operations, implementing market-based mechanisms for independent accounting and self-responsibility. Each brand calling upon group production lines, batteries, core technologies and other shared resources will be settled separately according to internal pricing mechanisms.

At the same time, the Group Engineering Research Institute has been split into five, establishing five brand-specific research institutes. This is completely different from the current industry consolidation and reorganization for mutual aid.

The core logic of this combination punch is only one—breaking the "big pot" mentality. In the past, the group's unified backup mode made each brand lack profit awareness, product homogeneity was serious, and internal resource competition was intense; now, profits go to the team, losses are borne by themselves.

However, carrying out internal partitioning on the eve of sales decline and profit cut is inevitable to experience pain. Independent accounting for each brand means a temporary decline in collaboration efficiency. If internal collaboration costs rise significantly in the short term, BYD may face the pain period of big enterprise disease.

Splitting the research institute into five, if coordination is not handled well, common platforms such as chassis and intelligent driving may face the risk of reinventing the wheel.

The effect of this transformation will not be immediate, but the direction is clear: farewell to extensive growth, return to the essence of operations.

After the disclosure of BYD sales data, multiple institutions released research reports. The overall view is optimistic, generally acknowledging that overseas sales exceeding expectations is the biggest highlight, and看好 flash charging technology + second-generation Blade Battery building differentiated barriers; at the same time, it is believed that the company is gradually coming out of the bottom of the fundamental situation, and domestic sales are being repaired month by month.

Among them, Oriental Securities maintained a "Buy" rating, believing that overall sales improved year-on-year and month-on-month, and overseas sales hit a new high; Huachuang Securities gave a "Strong Push" rating and raised the annual export expectation to over 1.8 million.

However, there are also different voices. CLSA lowered the full-year sales forecast from 4.9 million to 4.6 million, and the target price from 130 HKD to 120 HKD, to reflect sales lower than expected and domestic recovery slowing. However, CLSA still gave BYD a "High Confidence Outperform" rating.

This divergence essentially reflects the difference in the market's judgment on "whether BYD can stop bleeding domestically". No matter how strong the overseas market is, if the domestic market continues to lose blood, the overall growth ceiling remains clear.

Views of AutosKline:

From barbaric growth to stock competition, BYD has found incremental volume overseas, built barriers in technology, and turned the knife inward in organization. These actions show that Wang Chuanfu's team is fully aware of the problems.

But strategic clarity does not equal tactical smoothness. Shortcomings in exchange rate risk management led to 4 billion profits vanishing; ramp-up rhythm out of control, orders in hand but cars cannot be delivered; trapped in a price war quagmire, brand premium ability is being continuously diluted...

Wang Chuanfu said, "The worst time is over", but this does not mean "the good times are coming".

From hitting bottom to rebounding, there is a long road of capacity ramp-up, continuous consumption of domestic price wars, and periodic threats of foreign exchange risks in between.

SAIC, Geely, Chery... will not give BYD time to catch its breath. The competition in the second half of the year will be even more cruel.

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