BYD sold more electric vehicles than Tesla. More than any other company in the world. Their revenue hit $116 billion, bigger than Tesla's for the second year running. They exported over a million vehicles overseas for the first time in their history.
And their profit fell 19%. The first decline since 2021.
That tension, record scale, falling profits, is the whole story of BYD right now. Here's what happened.
The Numbers: Record Revenue, Falling Profit
- Revenue: RMB 804 billion ($116 billion), up 3.5% year-over-year, but missed estimates of RMB 836 billion
- Net profit: RMB 32.6 billion ($4.7 billion), down 19% from 2024, missed estimates of RMB 35.65 billion
- Gross margin: 17.74%, down from 19.44% last year
- NEV sales: 4.6 million units, up 7.73% year-over-year
- Overseas exports: 1.05 million units, up 150% year-over-year, surpassing 1 million for the first time
- R&D spending: RMB 63.4 billion ($9.2 billion), up 17% year-over-year
- Automobile revenue: RMB 648.65 billion, 80.68% of total revenue
- EV sales vs Tesla: BYD sold 2.25 million battery electric vehicles vs Tesla's 1.64 million
TranslationRMB stands for renminbi, China's currency, also called the yuan. When you see BYD's numbers quoted in RMB, you can roughly divide by 7 to get the US dollar equivalent. So RMB 804 billion is approximately $116 billion. The reason BYD reports in RMB is that they're listed on Chinese stock exchanges, the Shenzhen exchange and the Hong Kong exchange, rather than in New York. Their ADR (BYDDY) trades in the US, but the company itself reports in Chinese currency.
The Price War: Why Winning Is Costing Them
BYD is the biggest EV company in the world by sales volume. They got there partly by doing something ruthless: cutting prices aggressively to win market share in China, even when it hurt their own margins.
In 2025, China's EV market became a genuine price war. BYD cut some vehicle prices by as much as 30%. Dozens of smaller EV brands went under or pulled back. The strategy worked in terms of units sold, BYD hit their sales target of 4.6 million vehicles. But it came at a cost: their gross margin dropped from 19.44% to 17.74%, and net profit fell 19%.
BYD's own annual report called it bluntly: China's NEV industry is in a "brutal knockout stage" where automakers are sacrificing profit margins to stay in the game.
TranslationGross margin is the percentage of each sale a company keeps after paying for the product itself. For a car company, that means the cost of materials, components, battery, and assembly. BYD's gross margin dropping from 19.44% to 17.74% means they're keeping less from every car they sell, because they've cut prices to stay competitive. For context, Toyota's gross margin is around 20%, and Tesla's was around 18% in 2025. BYD is now operating in the same profitability range as its global rivals, but it got there by competing on price, not premium positioning.
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The Tesla Comparison
This is the number that matters to most people: BYD outsold Tesla in battery electric vehicles by more than 600,000 units in 2025. BYD sold 2.25 million pure EVs. Tesla sold 1.64 million, a decline of roughly 9% from 2024.
But revenue is where it gets interesting. BYD's total revenue of $116 billion dwarfs Tesla's $94.8 billion. However, Tesla's profit was $3.8 billion on that revenue, and BYD's was $4.7 billion. So BYD makes more money in absolute terms, but on nearly 25% more revenue. Tesla is still the more efficient profit machine, despite its struggles.
Elon Musk famously laughed at the suggestion that BYD was a competitor a decade ago. The world has changed considerably since then.
TranslationWhen people talk about "battery electric vehicles" (BEVs) versus "new energy vehicles" (NEVs), the distinction matters for BYD specifically. NEVs include both pure electric cars and plug-in hybrids, cars with both an electric motor and a petrol engine. BYD sells huge numbers of both. Tesla only makes pure EVs. So when comparing BYD to Tesla on total vehicle sales, BYD wins easily. On pure EV sales alone, BYD still wins, but by less. The broader NEV category is where BYD's real scale shows up.
The Overseas Bet
The most significant development in 2025 wasn't what happened in China, it was what happened outside it.
BYD exported over 1 million vehicles overseas for the first time, up 150% year-over-year. Europe is a particular focus: BYD registered a 272% year-on-year increase in EU sales in September alone. Brazil, Belgium, and Mexico were their top export markets through October. They're building factories in Hungary and Brazil to manufacture locally rather than shipping from China, which reduces costs and avoids import tariffs.
The overseas push is expensive. Building factories, establishing dealer networks, navigating different regulations in dozens of countries, all of this costs money before it generates returns. That's part of why profits are falling even as revenue grows.
Translation"Tariffs" are taxes that governments impose on imported goods. The EU and US have both introduced significant tariffs on Chinese-made electric vehicles, the EU's tariffs on BYD specifically are around 17-27% on top of standard import duties. This makes BYD cars more expensive in Europe than they would otherwise be, which is why building factories inside Europe (in Hungary) is so important. Cars made in Hungary don't face the same tariffs as cars shipped from China, giving BYD a competitive price advantage.
The R&D Story
One number stands out as genuinely remarkable: BYD spent RMB 63.4 billion ($9.2 billion) on research and development in 2025, more than their total net profit of $4.7 billion.
They've been spending more on R&D than they make in profit for at least four years running. This isn't a company optimising for quarterly earnings, it's a company building something for the long term. Unlike businesses that prioritise free cash flow, BYD is deliberately reinvesting every dollar it makes. The investments are going into battery technology (their second-generation Blade Battery launched this year, enabling 10% to 70% charge in five minutes), chips, software, and AI.
Their founder and chairman Wang Chuanfu told investors that BYD will continue heavy R&D investment for the next two to three years because "technology is the core competitive edge."
TranslationThe "Blade Battery" is BYD's proprietary battery technology, it's named for the blade-like shape of the individual cells, which can be packed more efficiently than traditional cylindrical or pouch batteries. The key advantages are safety (it's harder to catch fire), energy density (more range per kilogram), and cost. BYD supplies Blade Batteries not just to their own cars but to other manufacturers, including some Toyota models, which creates a separate revenue stream beyond car sales and makes BYD a supplier to the broader industry, not just a competitor within it.
The Bottom Line for Investors
BYD missed on both revenue and profit. For the first time since 2021, profits fell. The gross margin is compressing as the domestic price war shows no sign of ending. And overseas expansion, however promising, is expensive before it pays off.
↑ The Bull Case
BYD is the world's biggest EV maker by volume, and the gap with Tesla is widening. Overseas exports grew 150% in a single year and surpassed 1 million units for the first time, international business is becoming a genuine second engine. The Blade Battery technology is ahead of most competitors, and BYD's vertical integration (they make their own chips, batteries, and motors) gives them cost advantages that will matter more as the market matures. At some point the domestic price war ends, weaker players exit, pricing stabilises, and BYD's margins recover. The R&D investment being made now could create a technology moat that lasts a decade.
↓ The Bear Case
The domestic price war shows no sign of bottoming. BYD's own management described it as a "knockout stage", but nobody knows how long that stage lasts. Gross margins are falling, profits are falling, and the overseas expansion is expensive. European tariffs remain a significant barrier even with local manufacturing underway. And the geopolitical risk is real, any escalation in US-China or EU-China trade tensions could materially hurt BYD's international ambitions. Meanwhile Tesla, despite its struggles, still makes more profit per vehicle sold.
BYD won the volume race. The profit race is harder, and it's only just beginning.
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References
- BYD Company Limited, Full Year 2025 Annual Report (March 27, 2026)
- CnEVPost, BYD 2025 Full Year Results (March 27, 2026)
- Euronews, BYD profit slumps 19% after record year (March 27, 2026)
- CNBC, China's BYD sees first profit drop since 2021 (March 27, 2026)
Ticker: BYDDY (OTC) / 1211 (HKEX) / 002594 (Shenzhen) · Reported: March 27, 2026