BYD's Quarterly Profit Slumps 55% as Revenue Falls -- Update

By Jiahui Huang

Chinese auto giant BYD's net profit more than halved in the first quarter, even as it recorded strong overseas growth, dragged down by a weak performance in its home market.

The Tesla rival is the first of China's major carmakers to report earnings amid conflicting forces: Stiff competition and downbeat consumer sentiment have damped electric-vehicle sales in China, but the surge in energy prices due to the war in the Middle East is rekindling global interest in EVs.

BYD, long known for its wide product lineup and competitive pricing, is experiencing a growing divergence between its domestic and overseas markets--one heightened by rising oil and gas prices.

The Shenzhen-based EV maker said Tuesday that its net profit dropped 55% from a year earlier to 4.08 billion yuan, equivalent to $598 million, in the three months ended March. Sluggish home-market demand hit its top line too, with revenue declining 12% to 150.23 billion yuan.

Analysts had expected net profit of 3.45 billion yuan on revenue of 129.09 billion yuan, according to a Visible Alpha consensus estimate.

The results highlight how China's fiercely competitive EV market is eroding profitability even for industry leaders like BYD.

Abroad, it was a different story.

The world's largest EV maker sold a total of 700,463 units in the first quarter, with overseas shipments continuing to outpace domestic deliveries.

The export surge, with Europe becoming a key battleground for BYD and its rivals, further demonstrates the company's ability to transition from a Chinese automaker to a global brand. Nomura analysts estimate that BYD's overseas sales will make up nearly 50% of its auto revenue this year and surpass the threshold next year.

In the meantime, BYD is banking on new technology to attract customers. The company last month launched a new EV battery that can be fully charged in nine minutes, a technological advancement Citi said could help the automaker lead the market for at least a year.

Analysts expect BYD's new battery tech and model launches, together with its overseas push, to drive an earnings recovery from the second quarter, saying that the company likely hit a trough in the first quarter.

Overseas markets will likely continue to power BYD's volume growth in 2026, thanks to strong EV demand outside China and the company's localization strategy, according to BMI analysts.

However, they cautioned that it remains unclear how the Iran war will affect the company's future sales. Higher global energy prices could boost EV adoption rates in several markets, but persistently elevated prices will add to inflation and weigh on demand for new vehicles, the analysts wrote in a recent note.

Write to Jiahui Huang at [e-mail]

(END) Dow Jones Newswires

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