BEIJING/HONG KONG – BYD, the world’s top electric vehicle (EV) maker, saw its shares tumble as much as 8% in Hong Kong trading Monday, after unveiling its first quarterly profit decline in over three years. The company attributed the slump to fierce price competition within China’s EV market and a weakening domestic performance despite rising overseas demand.

Q2 Profit Miss and Market Reaction

BYD reported a 29.9% year-on-year drop in Q2 net profit, down to 6.4 billion yuan (approx. $894 million), well below analysts’ forecasts ranging from 7 to 10 billion yuan. The company cited aggressive discounts and a 1 billion yuan incentive paid to distributors that failed to significantly boost orders.

Shares in Hong Kong opened sharply lower—down 8% at the start, marking the largest single-day decline since May, before slightly stabilising. Effects were mirrored in Shenzhen.

Production and Domestic Weakness

In a further sign of strain, BYD logged its first consecutive monthly production declines since 2020, with August output down 3.8% year-over-year, following a 0.9% drop in July. Domestic sales, which account for 80% of total volume, sank 14.3% in August, triggering analysts to reduce the annual sales projection from 5.5 million to 4.9 million units.

Policy Pressures and Export Surge

The retreat in profitability also stems from regulatory pressures. Beijing has been pushing automakers to curb aggressive price slashes to ease deflationary strain and restore market order.

In contrast, BYD’s overseas performance remains robust. International deliveries of EVs and plug-in hybrids more than doubled to 550,000 units through July, and the company recently surpassed Tesla in European EV sales for the first time.

Summary Table

Despite a dominant global position and faster international growth, BYD is grappling with deep domestic pressure as China’s EV space turns fiercely competitive. Its Q2 slump and mounting challenges highlight that even a clear sector leader isn’t immune to market volatility. (zai)