BYD earned 20.5% less in the first half of the year. Overseas markets are growing, but China still drags down overall performance.
BYD released its results for the first half of 2026, and they are not particularly good. Revenues dropped to 344.82 billion yuan, a year-on-year decline of 7.13%, while net profit attributable to shareholders fell by 20.54% to 12.33 billion yuan.
The company attributes the decline to weakness in China’s NEV market and currency exchange losses. In short, its overseas expansion has not yet been sufficient to offset the challenges in its home market.
Sales declined, but the second half of the year started better
BYD’s largest segment, namely vehicles and related products, generated 275.34 billion yuan in revenue, 8.98% less than the previous year. This still accounts for 79.85% of the group’s total business. The electronics division saw a minimal increase of 0.96% to 69.41 billion yuan, contributing 20.13% of total revenue.
The weak first half is primarily due to sales performance. BYD delivered 1,808,511 NEV vehicles in the first half of the year, representing a year-on-year decline of 15.72%. However, there was improvement quarter on quarter: sales in the second quarter amounted to 1,108,048 units, only 3.24% lower than the previous year, whereas in the first quarter the decline was as high as 30.01%.
The start of the second half looks significantly better. In July, BYD sold 419,211 vehicles, a 21.76% increase year on year. This marked the third consecutive month of growth.
Exports are performing well, margins are rising, but inventories are too
The strongest aspect of the report is overseas sales. In the first half of the year, BYD exported around 792,000 vehicles, a 67.8% increase year-on-year. Exports accounted for approximately 44% of total sales during this period. In the second quarter alone, overseas sales reached 471,091 units, up 82.46% year-on-year and 46.68% compared to the first quarter.
This helped improve profitability. While gross profit dropped by 2.81% to 64.99 billion yuan, the gross margin increased from 18.01% to 18.85%. In other words, BYD is selling fewer vehicles, but the product mix is slightly better.
Higher-end brands also helped. Total sales of Denza, Fang Cheng Bao, and Yangwang increased by 61% year-on-year, with their share of the group’s passenger vehicle sales reaching 12.8%. This is no longer a marginal contribution.
BYD also continues to invest heavily. Expenditures on research and development amounted to about 28.9 billion yuan in the first half of the year, roughly 2.3 times higher than the net profit for that period. The cumulative investment in R&D has exceeded 270 billion yuan. This is impressive, though investors might prefer better results these days.
Cash from operating activities looks even better than profits. It increased by 17.3% to 37.34 billion yuan. However, there are downsides to expansion: the inventory turnover cycle lengthened from 79 to 109 days, which the company attributes to growing overseas sales and longer transportation times.
The implication for Europe and Poland is clear: BYD will push exports even harder, as this remains one of the few drivers of growth today. The question is whether the improvement in July signals a recovery or was just a better month.
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