BYD reported a steep decline in first-quarter profit, highlighting mounting pressure on automakers as China’s new energy vehicle (NEV) market entered a seasonal slowdown.
Net profit attributable to shareholders fell 55.38% year-on-year to 4.09 billion yuan ($594 million), according to the company’s financial results. Adjusted net profit, excluding non-recurring items, declined 49.24% to 4.15 billion yuan.
Revenue also dropped 11.82% to 150.23 billion yuan during the period, reflecting weaker sales and intensifying competition.
BYD sold 700,463 NEVs in the first quarter, down 30.01% compared to a year earlier and 47.82% lower than in the fourth quarter, when demand had been boosted by expiring incentives.
The downturn mirrors broader trends in the Chinese EV market, where reduced government support and seasonal factors have led to softer demand. Automakers have responded with aggressive price cuts and promotional campaigns, squeezing profit margins across the industry.
William Li, chief executive of Nio, had previously warned of such a slowdown. He said in September 2025 that as stimulus policies were phased out, demand would likely shift toward the end of the year, leaving the first quarter comparatively weak.
China had offered full purchase tax exemptions for NEVs in 2024 and 2025, with savings of up to 30,000 yuan per vehicle. From 2026 onward, the benefit has been reduced, with tax cuts capped at 15,000 yuan, contributing to a pull-forward of demand into late 2025.
BYD said the ongoing domestic price war remains a key factor affecting profitability in 2025, while rising hardware costs in the supply chain have added further pressure.
In a separate announcement, the company said it would increase pricing for its advanced driver-assistance systems. From May 1, the optional “God’s Eye B” smart driving system will cost 12,000 yuan, up from 9,900 yuan, reflecting higher global costs for computing and storage components.
