Quick Read
- BYD’s Q3 2025 profit fell 33% year-on-year to $1.1 billion, its second consecutive quarterly decline.
- Global BYD sales hit 3.26 million units in the first nine months, up 18.64% year-over-year.
- Overseas deliveries between January and September reached 701,600 units, up 132%.
- BYD’s R&D spending for Q1–Q3 exceeded net profit, reaching $6.14 billion.
- European sales surged, with September EU deliveries up 272.1% year-on-year.
BYD’s Q3 Financials: Profit Down, Revenue Holds
In the third quarter of 2025, BYD, China’s electric vehicle titan, faced a significant profit drop, reporting a 33% year-on-year decline. Net profit landed at 7.8 billion yuan (about $1.1 billion), marking the company’s second consecutive quarterly decrease. Revenue for the quarter stood at 195 billion yuan, a slight dip of 3% compared to the previous year (SpaceDaily).
This downturn comes after a period of robust expansion, with BYD previously setting records and even surpassing Tesla’s annual revenue in 2024. The contrast between soaring past performance and the current slowdown paints a complex picture: China’s EV market, although the largest in the world, has become fiercely competitive, squeezing margins for even its strongest players.
Domestic Pressures and the Price War
The Chinese EV sector’s relentless competition is driving automakers to their limits. A top industry group recently rebuked manufacturers for fueling a price war, just a week after BYD rolled out aggressive trade-in discounts. The pressure to offer lower prices, while maintaining innovation and quality, is testing profitability across the board.
Consumer demand within China has softened, intensifying the struggle for market share. As companies vie for buyers with increasingly attractive offers, the resulting squeeze has led many—including BYD—to look outward for growth.
Global Sales Surge: Overseas Markets Take Center Stage
BYD’s response to these headwinds is clear: ramp up its international presence. In the first nine months of 2025, BYD sold a staggering 3.26 million vehicles globally, up 18.64% year-over-year (CarNewsChina). Overseas deliveries between January and September reached 701,600 units—a 132% jump—spanning 117 countries and regions. Notably, BYD doubled its annual overseas sales target ahead of schedule, with cumulative exports now over 700,000 units.
Europe stands out as a bright spot. In September alone, BYD sold more than 13,000 vehicles in EU countries, representing a 272.1% increase year-on-year (ACEA). This surge underscores both the company’s successful pivot to global markets and the appetite for Chinese EVs abroad. The introduction of Japan-specific models at the Tokyo Motor Show and the opening of a production facility in Brazil further signal BYD’s intent to diversify beyond China.
Innovation at Any Cost: R&D Spending Surpasses Profit
Despite profit pressures, BYD is betting big on innovation. The company’s R&D expenses for the first three quarters soared to 43.75 billion yuan (about $6.14 billion), up 31% year-on-year. Remarkably, this figure exceeds net profit for the same period by 23.33 billion yuan. BYD is now the highest R&D spender among China’s A-share automakers, with cumulative investment topping 220 billion yuan ($30.9 billion).
This strategy reflects a calculated gamble: sacrificing short-term profitability to secure long-term leadership in technology and safety. For instance, BYD’s blade battery technology, lauded for its superior thermal stability and safety features compared to Tesla’s high-density cells, illustrates the company’s commitment to balancing performance with durability (EVWorld).
Models equipped with BYD’s “God’s Eye” driver-assistance system have sold over 1.7 million units to date, further demonstrating the company’s push for advanced, user-centric innovation.
Operational Shifts and Financial Discipline
In June, BYD implemented a standardized supplier payment cycle, shortening it to within 60 days. The Q3 report notes a reduction in accounts and notes payable, signaling improved financial discipline and responsiveness to regulatory requirements. Such changes are crucial for maintaining supply chain stability amid rapid growth.
Central international investment banks remain optimistic. Citigroup projects BYD’s sales to reach 4.67 million units in 2025 and 5.39 million in 2026, citing premium branding, hybrid technology, and rapid overseas expansion as core drivers.
The Road Ahead: Risks and Opportunities
BYD’s journey is emblematic of the broader shifts in the global EV landscape. The company’s dual focus on international markets and technological advancement may help offset domestic challenges, but it’s not without risks. Price wars, regulatory scrutiny, and the need for continual innovation create a demanding environment.
Yet, the company’s proactive approach—investing in R&D, expanding globally, and streamlining operations—positions it to navigate turbulence. As competition intensifies and consumer preferences evolve, BYD’s ability to adapt will be critical.
BYD’s Q3 results reveal the high-stakes balancing act faced by global EV leaders: while profit has taken a hit amid domestic pressures, the company’s strategic investments in research and international growth suggest resilience and ambition. Whether this gamble pays off will depend on BYD’s ability to convert innovation and overseas momentum into sustained profitability, redefining the future of electric mobility.