What’s Going On With BYD Sales?

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As reported by CnEVPost, BYD’s overall 3rd quarter 2025 sales were down 1.82% YoY, with passenger vehicles down 2.1%, while commercial vehicles were up 52.61%. While PHEV sales were down 23.72%, BEV sales were up 31.37%. While its sales in the Chinese market declined, overseas sales were up 146.42%. Looking deeper, the BYD brand saw the bulk of the decline, while premium brand Fang Cheng Bao stands out in a positive way, with sales up 344.87% in September, driven by the Ti3 BEV and recently launched Ti7 PHEV, which have tended to be supply-constrained.

However, this is BYD’s first YoY drop in sales since 2020, in a quarter when several other automakers saw increases. What’s happening?

Model Transition Out of Season

As I posted earlier, the 3rd quarter has been a transitionary quarter. This can be seen in the breakdown of sales by model. Their historically best-selling model, the Song Plus, is being replaced by the Sealion 06, which is in short supply. Overall, the Sealion series was up 363.56% YoY in September, while the Song Plus was down 57.94%. However, BYD’s traditionally second best-selling series, the Qin, also saw a sales decline of 10.83%. However, the Qin Plus saw a major refresh launch in the last week of September, with significant improvements to powertrain, battery, efficiency, and equipment, accompanied by a mild price reduction. BYD also recently introduced a more capable Tang….

I didn’t anticipate this timing, based on past product launches. The traditional downtime for product refreshes has aligned with 1Q, when overall sales tend to drop due to Chinese New Year. Production drops due to factory upgrades tended to happen when domestic sales were seasonably low. 2025 models incorporating BYD’s “God’s Eye” intelligent driving system launched in 1Q. While BYD has launched models in 2H, they have tended to be relatively limited. I figured that the Sealion 06 was going to be the bulk of it.

However, we are seeing a significant shift this year. Multiple new models were introduced, like the Fang Cheng Bao Ti7 and the recently launched Denza N8L. In addition, almost every model is seeing a refresh, particularly the high-volume models, some months after their last refresh. This is especially the case for Dynasty series models, which took the largest sales hit in the quarter. BYD is also launching multiple PHEV models with greater capabilities and longer battery range, which could help to reduce the decline. Launching high-volume models in the second half of the year tends to align more with western markets that launch new model years in the year prior.

It will be interesting to see if this signifies a difference in product cycle seasonal timing going forward. Will the traditional Chinese New Year seasonal dip be more moderate? Or will we see another round of introductions and refreshes in 1Q? Is BYD trying to respond to the price war with a product offensive? They always said that product development was one of their greatest strengths. Only time will tell.

Pulling Back from the Price War and Preemptively Addressing Regulations

BYD has reportedly cut their sales target for 2025 to 4.6 million, which I expect the company will exceed, as its targets tend to be conservative. But this was reportedly a downward revision from earlier internal targets, indicating that factors emerged that they didn’t anticipate earlier in the year.

The price war is likely one of those factors. BYD is currently the most profitable automaker in China and the most profitable automaker that only makes vehicles with a plug globally. In addition, due to how BYD accounts for its R&D spend (which is higher than its profits), that number underrepresents the company’s overall performance. Several of BYD’s competitors have driven sales growth by extending losses (e.g., NIO). Out of any company in China, BYD is likely in the best position to win a price war.

However, BYD pulled back on its discounts. Beijing has been critical of the price war, with that criticism increasingly sounding like threats. Several automakers have appeared to ignore them, extending the price war. Ignoring Beijing isn’t smart in China. I expect those threats to turn into actions soon.

When looking at how BYD approaches regulatory challenges, it has tended to take a preemptive approach. For example, the company built anticipated tariffs into the pricing of its cars in Europe, generating criticism and relatively slow initial sales. However, once the tariffs went into effect, it didn’t have to raise prices, it improved the value proposition of several models, and sales took off. I expect that similar preemptive actions are having an impact on current sales within China but will set them up to come out ahead long term.

I anticipate that BYD has adjusted pricing to the point that it can show profitability on every model. When expected regulatory measures hit, little will likely change for BYD’s pricing. However, that pricing could become far more competitive as other automakers scramble. This could reshape the market. BYD’s Stella Li recently predicted that the Chinese market is looking at a consolidation phase and “brand clearout.”

In addition to the price war, China is taking measures to stop gray market exports of zero-mile used cars, requiring export permits next year. This practice has let many people (outside of the US) buy vehicles that are not available in their market, often at prices closer to those in the Chinese domestic market. I have previously driven a gray market import in Tahiti. While the car was fine, the controls were in Chinese, the radio stations didn’t work, etc. In addition, these vehicles do not have dealer support and tend to not receive OTA updates, which are becoming increasingly important with software-defined vehicles. This can lead to a sub-par experience and negative feelings about the brand. When I spoke to a BYD dealer in Aruba earlier this year, he said that gray market imports were his biggest competition, and much of the customer dissatisfaction with the brand came from these unofficially imported Chinese domestic market vehicles. While this is by no means confined to BYD, the company received criticism and appears to have already started to crack down on dealers for the practice. The net result is a predicted drop in domestic sales (that were to be exported on the gray market), but an increase in official exports (with likely higher margins). By taking action ahead of the government intervention, BYD can be in a better position once the requirements go into effect.

Global Shift

Speaking about global sales, they have more than doubled this year and were up 146.42% in 3Q. BYD recently launched its 8^th Ro-Ro ship, giving its own fleet an export capacity of over a million vehicles. In addition, several factories (Hungary, Brazil, Thailand, Uzbekistan, etc.) are still ramping up to drive further growth, and more (Turkey, Indonesia, Malaysia, Pakistan, etc.) will start production soon. Localization is increasing, and BYD expects to produce all EVs for Europe locally by 2028.

Global product offerings are also expanding. In addition to vehicles introduced recently at IAA in Munich, Europe is poised to soon get BYD’s latest “Super E” platform and “Megawatt Flash Charging.” BYD is also bringing its latest models to global markets at a faster pace, such as the Qin L EV (sold as Seal 6 EV) in Malaysia.

Up until recently, BYD’s sales outside of China were negligible. However, overseas sales exceeded 20% for the quarter and are projected to beat that percentage across the whole year. Given the size of the Chinese EV market, its 4Q footprint should roughly reflect the overall global EV market that it has access to (i.e., excluding the US). With the added production, I expect that proportion outside of China to continue to expand.

A Little Perspective

Even though a 2 percent drop was worse than expected, BYD is still on solid ground. In terms of bragging rights. BYD’s NEV sales lead is essentially insurmountable this year, despite the growth of some competitors. PHEV sales are far ahead, despite the recent decline. In addition, having outsold Tesla in BEVs for the past four quarters and currently holding a ~388,000 lead so far this year, BYD will undoubtedly take the full year BEV sales crown for 2025. The market is likely to shift overall to BEVs, and BYD’s increased BEV share is good in the long term. However, I am sure BYD would like its PHEV sales to also be growing. In September, BYD’s PHEV sales were down 25.6% while its BEV sales were up 24.3%.

BYD is still the largest automaker overall in China. And it is building sales while establishing brand preference, with the highest customer loyalty in the Chinese market. Beyond China, BYD has taken the EV sales crown throughout most of the Global South, as well as moving into first place in European markets like Spain and Italy. According to recent tallies for August, BYD outsold Tesla in Europe and became the third largest automaker globally. In addition, its premium vehicles at higher price points and expansion into markets that support higher prices could lead to improved financial performance, despite sales totals.

Perhaps most importantly, BYD is building a technology arsenal and IP stockpile that will allow it to introduce new, more advanced product. Production interruptions to update factories for new and improved models tend to lead to short-term sales reductions. BYD is launching new and refreshed models at a fast pace, beyond typical seasonality. That product will drive long term sales.

Overall, I am sure many within BYD would have preferred the stellar growth to have continued uninterrupted. However, many of their domestic competitors relied on tactics that are financially detrimental and increase regulatory risks. Other companies with heavy US presence saw a bump in sales that were pulled forward due to the end of subsidies, but that sets them up for future challenges due to a lack of subsidies combined with cost increases due to tariffs and protectionism. The potential for a global recession could also lead to reduced sales, but BYD is in a strong position to persevere and will not be the only automaker impacted.

As my wife says, “unless the flight attendants are freaking out, don’t worry about the turbulence.” Some will try to make a big deal out of the 3Q sales decline, but BYD is still doing well overall in context. It will be interesting to see how future quarters develop.

Also see: BYD BEV Sales Up 24% in August