A BYDthe largest electric car manufacturer in China, this Friday (27), had profit drop greater than expected and released for the first time a decline in the number of employeeshit by weak sales in the country.
Annual net profit fell 19 percent to 32.6 billion yuan ($4.72 billion), it said. The result marked the company’s first annual profit drop in four years. Analysts, on average, expected a drop of 12.1%, according to data from the (London Stock Exchange).
BYD could face a tougher outlook in 2026 as intense competition and softer domestic demand are likely to keep pressure on the company even as overseas growth continues, analysts say.
The automaker has been losing ground as rivals such as Leapmotor and Geely reduce its technological lead.
The company was the largest automaker in 2025, but fell to fourth place in the first two months of this year, after its overall sales fell the most since the pandemic.
Revenue grew 3.5%, the weakest pace in six years, and the automaker reduced its workforce by 10.2% to 869,622 employees at the end of 2025.
In the fourth quarter, profit fell 38.2% to 9.3 billion yuan from a year earlier, the third consecutive quarter of decline.
The gross profit margin for automobiles and related products fell 1.8 percentage points to 20.5% last year.
Strong political support, but margins under pressure
The drop in profit, after years of rapid growth, highlights a more cautious view of the world’s largest automotive market.
While political support remains strong, margins are under pressure as returns increasingly depend on scale, cost control and global expansion.
“We also recognize that competition in the (electrified vehicle) sector has reached a feverish level and is going through a brutal knockout stage,” said BYD President Wang Chuanfu while reaffirming the international expansion strategy.
“The focus on technology upgrades will help drive price competitiveness, while overseas sales and localization remain the key focus for growth this year,” Macquarie analyst Eugene Hsiao said.
To revive sales, BYD revealed 11 models with faster charging batteries and committed to growing its instant charging network. Still, the line of higher prices is unlikely to be enough to boost sales as consumers, analysts say.
Among its national peers, Geely reported a 36% increase in 2025 net profit and Xpeng recorded its first positive quarterly result.
