BYD shares dropped nearly 5% in Hong Kong after first-half results showed weaker revenue and profit despite rapid overseas growth. International sales helped offset a sharp slowdown in China.
First-half revenue fell 7.1% to 344.8 billion yuan, or about $51 billion. Shareholders’ net profit dropped 20.5% to 12.3 billion yuan, which is approximately $1.8 billion. Still, overseas revenue climbed 34% to $27 billion and exceeded half of total business. This growth cushioned a 31% revenue decline in Greater China.
BYD also posted stronger quarterly profit. Citi data showed second-quarter net profit rose 30% from a year earlier to 8.2 billion yuan, or around $1.2 billion. Meanwhile, exports jumped 68% to 792,000 vehicles during the first half. Overseas revenue represented most of BYD’s first-half sales for the first time.
The international push followed heavier pressure in China, where BYD faces aggressive competition from companies including Geely and Xiaomi. Government subsidies have also declined.
Weak consumer demand has added further strain. BYD also cited higher costs for commodities, raw materials and semiconductors as factors that squeezed profit margins. Despite slower domestic sales, BYD surpassed Tesla in total electric vehicle sales during the first six months of the year.
BYD’s international expansion now faces rising trade friction. Europe has introduced measures to protect domestic manufacturers from Chinese electric vehicle competition.
The company acknowledged that growing political tensions have made international markets more complicated. Shipping costs, tariffs and regulatory requirements could also increase the cost of expansion.
The European Union already applies additional tariffs to Chinese battery-electric vehicles. It has also considered new tariffs on Chinese hybrid vehicles. Brazil and Mexico have adopted measures targeting Chinese automotive imports as well. These barriers create another challenge as Chinese manufacturers seek more growth outside their home market.
Can overseas demand continue offsetting China’s slowdown while BYD faces higher costs and tighter trade barriers abroad?
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BYD does not face China’s slowdown alone. Volkswagen, Mercedes-Benz, BMW and Porsche recorded second-quarter Chinese sales declines ranging from 30% to 41% year over year. Each company also reported first-half Chinese revenue declines exceeding 20%. Those losses reduced global profitability and erased some gains generated in other markets.
Independent auto analyst Lei Xing described the declines as some of the steepest quarterly sales contractions German automakers have experienced in China. General Motors has also struggled. The company once generated about $2 billion in annual profit from China but has posted significant losses there during the past two years.
Chinese regulators are tightening oversight as well. Authorities plan stricter audits of rapid vehicle development cycles to reduce safety risks in newly launched models. BYD is also expanding its Denza brand in Europe’s premium vehicle market. The move forms part of its broader international push as competition and pricing pressure remain intense in China.
BYD’s overseas expansion helped soften a steep China slowdown, but first-half revenue and profit still declined. Rising exports provide another growth channel, while stronger competition, regulatory pressure, shipping costs and international tariffs create new hurdles for the automaker.