BYD Shares Plunge Amidst Intensifying Market Pressures

BYD's stock is experiencing a severe downturn, driven by disappointing quarterly performance and fierce domestic competition. The Chinese electric vehicle manufacturer's shares have plummeted to their lowest level in nine months, establishing a clear downward trajectory for the equity.

Despite mounting challenges in its home market, BYD's aggressive internationalization strategy is beginning to yield results. The company witnessed an explosive 160% surge in overseas sales during the third quarter, with European and Latin American markets emerging as primary growth drivers. This global push represents BYD's strategic response to compensate for increasing pressure within China's competitive landscape. Since reaching its peak valuation in May, the stock has declined by 36%, now trading at its lowest point since the beginning of the year.

Profitability Crisis Deepens

The core issue plaguing the automaker centers on deteriorating profitability metrics. While BYD managed to increase overall revenue during the first nine months of 2025, its net profit experienced a significant contraction. The situation proved particularly dire in the third quarter, when net earnings collapsed by 33%—substantially below market expectations.

This divergence between rising sales and falling profits highlights the severe margin compression affecting the company. A brutal price war within China's electric vehicle sector is forcing the automotive giant to sacrifice profitability in exchange for maintaining market presence. Gross margins contracted markedly during the July-September period.

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

Sales Figures Confirm Negative Trend

Recent delivery statistics further corroborate the concerning pattern. BYD reported a sharp decline in vehicle sales for October, marking the second consecutive month of deteriorating performance. Sales of electric vehicles specifically dropped by 12% compared to previous periods.

Key factors behind this downturn include:

• A substantial contraction in plug-in hybrid vehicle sales
• Third-quarter electric vehicle deliveries declined by 1.8%
• Domestic market share has been steadily eroding since last year's peak
• Competitors including Geely and Changan reported robust growth during the same timeframe

The widening gap between BYD's performance and that of its rivals underscores the intensifying competitive dynamics within the world's largest automotive market.