BYD Shares: Navigating Domestic Challenges Amid Global Expansion

Chinese automaker BYD finds itself balancing contrasting realities as its international growth momentum accelerates while domestic market pressures intensify. The electric vehicle manufacturer's latest performance data reveals a company at a critical juncture, with profitability concerns mounting even as strategic expansion shows promising results.

BYD's global strategy is yielding significant returns, particularly in European markets where the company is making substantial inroads. Recent developments highlight this international success:

• United Kingdom: October sales surged by an impressive 349%, with BYD surpassing Tesla in year-to-date vehicle sales
• Germany: Registrations multiplied ninefold to reach 3,353 units during October
• Production expansion: The Hungary facility will commence pilot production during the first quarter of 2026
• Premium brand rollout: Denza will enter European markets in spring 2026, followed by Yangwang later that same year

The company is also strengthening its presence in Australia, where the new SEALION 8 SUV becomes available for pre-order in December, with initial deliveries scheduled for early 2026.

October Sales Figures Reveal Diverging Trends

BYD reported 441,706 vehicles sold during October, representing an 11.47% improvement over September's performance. However, this figure marked a 12.13% decline compared to the same period last year, continuing a two-month trend of year-over-year sales contraction.

The underlying data reveals sharply contrasting performance between vehicle categories:

Should investors sell immediately? Or is it worth buying BYD?

• Battery electric vehicles (BEVs): Demonstrated solid growth with a 17.37% increase to 222,559 units
• Plug-in hybrid electric vehicles (PHEVs): Experienced a substantial 31.07% decrease, extending a seven-month downward trajectory

This performance contrasts with China's overall electric vehicle market, which recorded 7.3% growth during the same period.

Profitability Under Significant Pressure

Intense price competition in BYD's home market has substantially impacted financial results. Third-quarter 2025 figures showed net profit declining by 32.6% to 7.82 billion RMB. Revenue also decreased by 3.05% to 195 billion RMB, an unusual occurrence for the company.

Particularly concerning was the 1.82% drop in new energy vehicle sales during the third quarter—the first decline since the first quarter of 2021. This indicates substantial headwinds in BYD's primary market.

Chinese Market Conditions Remain Challenging

Despite international successes, BYD continues to face difficulties in its domestic market. China's overall passenger vehicle market contracted by 0.8% in October, ending an eight-month growth streak. The persistent price war continues to erode profit margins while putting pressure on sales volumes. Within this volatile environment, BYD must compete aggressively to maintain market share.

The company's situation reflects the broader challenges facing automakers in China's evolving electric vehicle landscape, where rapid growth has given way to intensified competition and margin compression.