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Amid progressively contracting sales revenue, Chinese electric vehicle giant BYD has been forced to significantly recast its 2025 sales targets. The company has slashed its forecast by 16%, from an ambitious RMB39,300 million ($5.5 million) down to RMB32,850 million ($4.6 million), signaling a potential end to its era of record-setting expansion. On Monday, Hong Kong-listed BYD’s shares slid nearly 8% as a result.
The decision reflects a challenging market environment, particularly the flattening of sales in its crucial home market. Chinese car buyers account for nearly 80% of its total sales. But it now faces intense domestic competition, mostly led by promotions-led price wars in the first eight months of the year. This slowdown is compounded due to a decrease in global demand.
BYD has only achieved 52% of its initial 5.5 million target, making the original goal increasingly unattainable, says CNBC.
This strategic retreat follows undeniable signs of a slowdown. In early August this year, market research firm Rho Motion said that though global EV sales went up 21 percent year on year in July, it was still the slowest growth rate since January. It reported that momentum in plug-in hybrid sales in China contracted. Rho also said that BYD recorded its third monthly drop in registrations.
BYD recently reported a 30% drop in quarterly profit, its first such decline in over three years. Production has not waned, only domestic sales slid for two consecutive months, a contraction not seen since 2020. This pared-back outlook is a response to both fierce competition from rivals like SAIC and Geely Auto and broader deflationary pressures within the Chinese economy, which have been exacerbated by a prolonged housing downturn that has dampened domestic demand, according to a Bloomberg report.
Sources close to CleanTechnica at BYD in Shenzhen, however, said that the slowdown — internally considered as the most moderate annual growth in five years — is only temporary while BYD is recalibrating its production and plans for the introduction of new models. The company sold over 450,000 units overseas last July and established nearly 50 international branch offices.
While Thailand will become the manufacturing center of BYD for the ASEAN region, it has plans to set up a manufacturing facility in Telangana — but has yet to get approval from the Indian government. BYD also has major vehicle plants in Europe, but they are not yet operational. One plant in Hungary is scheduled to open in October 2025, and another in Turkey in March 2026. Growth in Europe is key for BYD’s international expansion, as North America is still not an open market for the company.
Regaining a foothold in the Chinese market is seen to come soon since “more collaborations will happen,” because smaller EV brands are feeling the intense market forces in the tight competition between the big Chinese brands SAIC, Li Auto, and Geely.
Email me at tribs.tribdino@gmail.com
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