Chinese electric vehicle and battery maker BYD reported a notable drop in second-quarter net income as competition in the domestic new energy vehicle (NEV) market intensified.
The company posted net income of RMB 6.36 billion ($892 million) for the quarter ended June 30, down 29.9% from a year earlier and 30.6% from the first quarter, marking its second consecutive quarter of sequential decline, according to its semi-annual results released on Thursday.
Revenue for the quarter reached RMB 201.0 billion, up 14.0% from the same period last year and 17.9% from the first quarter. BYD’s gross margin fell to 16.27%, down 1.15 percentage points year-on-year and 3.8 points from the previous quarter.
NEV sales in the second quarter totaled 1,145,150 units, reflecting a 16.1% increase year-on-year and a 14.4% rise from the first quarter, underscoring continued demand despite narrowing profit margins.
Analysts noted that the decline in net income, despite rising revenue, highlights the pressures BYD faces from intensifying price competition in China’s rapidly expanding EV market. In February, the company rolled out Smart Driving Edition updates across more than 20 models, but sales momentum fell short of expectations. In late July, BYD introduced lower-priced variants of its Yuan Up compact SUV without advanced driving features, signaling an adjustment in its pricing strategy.
BYD’s overseas operations provided a contrasting performance, with international NEV sales climbing 144.7% year-on-year to 258,182 units in the second quarter, and up 25.3% from the previous quarter.
For the first half of 2025, BYD reported record revenue of RMB 371.3 billion, a 23.3% increase from the same period last year, while net income rose 13.8% to RMB 15.51 billion. The gross margin for the first half stood at 18.01%, slightly lower than the 18.78% recorded a year earlier, primarily reflecting pricing pressures in the domestic market.