Shares in electric vehicle maker BYD slid on Monday after the company reported its first quarterly profit decline in more than three years, with analysts warning that its competitive edge is being eroded by Chinese government efforts to halt a prolonged price war.
Net profit at the world’s biggest EV producer fell 30% in the second quarter to 6.4 billion yuan ($895 million) from a year earlier, after doubling in the first quarter.
Its Hong Kong-listed shares closed 5.2% lower, following an 8% plunge at the open — the steepest one-day drop since May 26. BYD’s Shenzhen-listed stock fell 3.8%.
The automaker has expanded rapidly in recent years by leveraging its vertically integrated supply chain to fund aggressive price cuts, leading a years-long price war in China’s auto market. But authorities, worried about the sector’s long-term health, have ordered carmakers to end the discounting.
Analysts at Jefferies said BYD’s “surprising underperformance” reflected a mix of weak sales momentum and structural headwinds that are undermining its once-formidable advantages. They cut their 2025–2027 earnings forecast for the company, noting: “In short, BYD’s gravy train—fueled by scale, cost cuts, and tech leadership—has lost speed.”
Citi analysts said BYD’s profit missed consensus expectations of 7–9 billion yuan and their own forecast of 10.3 billion yuan. They noted that price cuts during the period had failed to lift sales enough and that BYD had paid a 1 billion yuan special incentive to dealers.
The company is targeting global sales of 5.5 million vehicles this year, but as of end-July it had sold 2.49 million, just 45% of its goal. BYD is scheduled to release August sales figures later on Monday.
