BYD's Dilemma: Domestic Sales Decline for Eight Consecutive Months Amid Market Saturation and Price Competition, Growth Stalls

*This content was translated by AI.

BYD released its sales analysis results for April 2026. Including commercial vehicles such as buses, the company sold 321,123 units in the month. Net profit fell 55.4% year-on-year to 4.09 billion yuan (approximately 884.5 billion won, based on Hanwha exchange rates). This figure reflects a continued eight-month decline in domestic sales in China, even as overseas exports achieved record-breaking performance.

Market saturation and intense price competition in China's electric vehicle sector have been key factors behind BYD's weak domestic sales. Price reduction policies implemented since the beginning of the year have fueled consumer expectations of further price drops, leading many to delay purchases. Additionally, new competitors such as Xiaomi have entered the market with high-performance, low-priced models, while smart car brands backed by Huawei have intensified their market. Moreover, the Chinese government's reduction and eventual suspension of electric vehicle purchase subsidies have weakened the purchasing power of price-sensitive consumer groups.

In contrast to the domestic market, BYD's overseas performance has grown significantly. Overseas deliveries in April 2026 reached a record high, with market share expanding rapidly in Southeast Asia, South America, and the Middle East. In particular, BYD has firmly secured the number one position in the electric vehicle segment in Thailand and Brazil. Beyond simple exports, BYD is building or preparing to operate local production facilities in countries such as Thailand, Hungary, and Brazil. This localization strategy is expected to reduce tariff burdens, cut logistics costs, and enable the supply of models tailored to local markets. However, BYD's strategy to overcome domestic weakness through overseas exports has so far resulted in eight consecutive months of declining sales.

Alongside declining sales, worsening profitability has emerged as a serious issue. Despite price cuts, reduced sales volumes have significantly compressed per-vehicle margins. Over the past eight months, slowing sales have led to inventory buildup, making adjustments to factory operating rates inevitable. Additional promotional costs for inventory clearance are also anticipated. Furthermore, the financial burden of investing in future technologies such as autonomous driving and all-solid-state batteries continues to grow.

BYD faces two simultaneous challenges: reviving the domestic market and expanding into overseas markets. Geopolitical uncertainties, including the European Union's investigation into Chinese-made electric vehicle subsidies and tariff hikes by the United States, are also cited as risk factors. Starting in May, BYD has announced plans for large-scale software updates and an enhanced lineup of new vehicles. Whether the company can secure breakthroughs through new technologies or vehicle launches in the coming quarters will determine its position in global competition. Meanwhile, the domestic market situation remains generally optimistic, with imported car brands achieving the 10,000-unit sales target faster than any other brand.

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*This content was translated by AI.