China's biggest electric automaker by sales, on Friday posted a bigger-than-expected profit drop and disclosed a headcount fall for the first time, hurt by weak sales in its home market. Net profit fell 19% to 32.6 billion yuan ($4.72 billion), BYD said in a stock exchange filing, its first annual profit drop in four years and steeper than an average 12.1% fall expected by analysts polled by LSEG. The Reuters Iran Briefing newsletter keeps you informed with the latest developments and analysis of the Iran war. Sign up here. Advertisement · Scroll to continue
BYD could face a tougher earnings backdrop in 2026, as intense competition and softer domestic demand are likely to keep pressure on profit, even as overseas growth continues, analysts said. The automaker was once propelled by its affordable Dynasty and Ocean series, but has been losing ground as rivals such as Leapmotor (9863.HK), opens new tab and Geely (0175.HK), opens new tab narrow its technological lead. It was China's biggest automaker in 2025 but fell to fourth place over the January to February period as its overall sales dropped by the most since the COVID-19 pandemic. Revenue grew 3.5%, its weakest pace in six years, and the automaker cut its workforce by 10.2% to 869,622 as of 2025 end. Advertisement · Scroll to continue
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For the three months through December, profit slumped 38.2% to 9.3 billion yuan from a year ago, its third straight quarter of decline. Gross profit margin from autos and related products, which contributed 80.7% to operating revenue, slipped to 20.5% last year, down 1.8 percentage points from a year ago. POLICY SUPPORT STRONG, BUT MARGINS UNDER PRESSURE BYD's shares in Hong Kong rose 3.7% ahead of the results and closed up 2.1% in Shenzhen (002594.SZ), opens new tab. The drop in profit, after years of rapid growth, raises doubts about BYD's earnings visibility, underscoring a more cautious view on the EV sector in the world's largest auto market. Although policy support remains strong, margins are under pressure as returns increasingly depend on scale, cost control and global expansion. "We also recognise that competition in the (new energy vehicle) industry has reached a fever pitch, and is undergoing a brutal 'knockout stage'," BYD chairman Wang Chuanfu said, while reaffirming its overseas push.
