China’s largest electric carmaker has reported its first annual profit drop in four years and a fall in staff numbers amid weak sales in its home market.
BYD’s net profit fell 19 per cent to 32.6 billion yuan (£3.6 billion) last year, steeper than the 12.1 per cent fall expected by analysts, according to a poll by LSEG.
Revenue rose by 3.5 per cent, the weakest pace in six years, and the carmaker cut its workforce by 10.2 per cent to 869,622 in 2025.
“Competition in the [new energy vehicle] industry has reached a fever pitch and is undergoing a brutal ‘knockout stage’,” Wang Chuanfu, BYD’s chairman and chief executive, said.
The company was China’s biggest automaker last year but fell to fourth place over the January to February period as its sales dropped by the largest amount since the Covid-19 pandemic.
BYD could face an even tougher earnings backdrop this year as intense competition and softer domestic demand are expected to keep pressure on profits, analysts said, even as overseas growth continues.
Growth at the carmarker was once driven by its affordable Dynasty and Ocean series, but it has lost ground to rivals such as Leapmotor and Geely as they narrow its technological lead.
For the three months to the end of December, profits fell 38.2 per cent to 9.3 billion yuan (£1 billion) from a year ago, its third straight quarter of decline.
The drop in profit after years of rapid growth has raised doubts about the predictability of BYD’s earnings, underlining a more cautious view on the electric vehicle sector in China, the world’s largest car market.
“Focusing on tech upgrades would help drive competitiveness over price, while overseas sales and localisation remains a key focus for growth this year,” Eugene Hsiao, an analyst at Macquarie, said.
BYD makes only all-electric and plug-in petrol-electric hybrid vehicles, so has suffered most from the expiration of subsidies on new electric vehicles in China.
Sales were also affected this year by a revision to Chinese subsidies favouring models priced higher than those in BYD’s core budget segment. Cars going for less than 150,000 yuan (£16,300) accounted for more than 61 per cent of BYD’s domestic sales in November.
To revive sales, BYD has unveiled 11 models with a faster-charging battery and pledged to grow its flash-charging network. Even so, analysts warned, the higher-priced line-up was unlikely to be enough to boost sales as consumers sought affordable options.
BYD said it would expand sales abroad. Revenues from vehicles and related products increased by 5 per cent last year due to strong sales growth in overseas markets, which have better profit margins.
The carmaker also faces tighter liquidity after it was forced to make timely payments to suppliers by tougher regulations aimed at helping parts providers, who have been battered by the automakers’ price war.
