BYD reaches a critical milestone: its future now depends on markets outside China

BYD’s international expansion is paying off. The Chinese company now sells more than half of its output outside China, improving its profitability.

In China, BYD had a very poor start to the year. Its sales there dropped significantly—nearly 50% decline in the first half! This loss couldn’t be offset by growth in its premium brands, Fang Cheng Bao and Denza. Yet despite this substantial decline, total deliveries remained roughly the same as in 2025 due to a surge in international sales. For the first time, these accounted for over half of the group’s automotive division’s revenue (53%).

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Impressive for a manufacturer that exported almost nothing just 5 years ago. This refers to the proportion of sales from international operations, not total sales volume. It’s important to note that in terms of the number of vehicles sold, the domestic market still leads. BYD has exported 795,256 vehicles, compared to nearly one million in China (BYD + Fang Cheng Bao + Denza + Yangwang).

The distinction between volume and revenue is important. It shows that BYD sells at a higher price when exporting... and thus earns more money. Its gross margin would have increased from 18.01% to 18.8% between the first half of 2025 and 2026. Of this, 22% came from its international operations alone. However, since total revenue dropped by 7.1%, net profit also declined by 20.5%.

BYD’s decline in China is mainly attributed to the downturn in the rechargeable hybrid market. It is also due to supply tensions for second-generation Blade batteries. Production is expected to continue growing in the second half of the year, which could theoretically improve the situation. This is all the more urgent as new models are being launched at a rapid pace. Additionally, these batteries should soon begin to be supplied to other automakers. They are also set to make their debut in widely available cars in Europe by 2027.