BYD's "Crown" supports the weight! Annual sales of 4.5 million units, but profits have dropped by 19% | Breaking down the annual report

Byline | Mi Mi

This is @闺蜜财经’s 1766th original post

“The throne” is already secure, but “the crown” is starting to feel heavy.

On the evening of March 27, 2026, BYD, the king of new-energy vehicles, released its 2025 results. The numbers are impressive: revenue first exceeded the 800 billion mark, it has held the top spot globally in new-energy vehicle sales for four consecutive years, full-year vehicle exports surpassed one million units, overseas business grew by more than 40%—truly霸气侧漏.

But if you look closely into the financial report, you can also find some subtle issues, such as revenue growth dropping sharply from 29.02% in 2024 to 3.46%, net profit falling 18.97%, operating cash flow being cut in half, and so on.

After reading this annual report, the biggest takeaway for Mi Mi is: beneath the halo, shadows seem to be spreading.

01

First, let’s talk about revenue.

What does BYD’s 3.46% revenue growth in 2025 mean? Mi Mi sees that this is its lowest level in the past six years. Even in 2020, when the lockdowns were at their most severe, BYD’s revenue growth was still 22.59%.

Chart source｜Eastmoney (Thank you!)

By business segment, in 2025 BYD’s automotive business contributed revenue of 648.646 billion yuan, with its share of total revenue rising from 79.45% to 80.68%. Full-year vehicle sales exceeded 4.6 million units, ranking first globally for four consecutive years.

However, BYD’s average selling price per vehicle seems to be declining, because passenger vehicle sales grew by 6.94%, but the revenue growth rate for that segment was only around 3%.

It must be acknowledged that as penetration gradually increases, the new-energy vehicle market has been slowly shifting from “incremental competition” to a “stock competition” phase. To protect market share, BYD had to offer price concessions.

For the mobile phone components and assembly business (including AI compute power infrastructure), BYD’s 2025 revenue fell by 2.74%, and its share of total revenue dropped to 19.31%.

Overseas business looks particularly strong. It surged from 221.9 billion yuan in 2024 to 310.7 billion yuan, an increase of more than 40%, and its share of total revenue rose from 28.55% to 38.65%. Exports of fully built vehicles surpassed one million units, up 1.4 times year on year.

BYD also spared no expense for this. In 2025, cash outflow from investing activities increased 54.38% year on year to 223.1 billion yuan, largely because overseas expansion was “absorbing” it.

So BYD’s business performance in 2025 tells us it is transitioning from a high-speed growth stock to a blue-chip stock facing fierce competition.

02

For profits, BYD is even more strained. The year-on-year growth rate of net profit attributable to shareholders fell from 34% in 2024 to -18.97% in 2025, to 32.619 billion yuan; non-recurring net profit was 29.446 billion yuan, down 20.38% year on year.

Especially in the fourth quarter, BYD’s single-quarter net profit fell 38.2% year on year, and it was already the third consecutive quarter of year-on-year decline, coming in below market expectations.

Chart source｜Eastmoney (Thank you!)

In 2025, BYD’s selling expenses grew 8.72%, administrative expenses grew 8.34%, and R&D expenses grew 8.99%—all well above the revenue growth rate.

Among them, R&D expenses were 57.978 billion yuan, and their share of revenue rose from 6.97% to 7.21%. “Technology is king, innovation is the foundation” is BYD’s core principle. The second-generation Blade batteries, flash charging technology, mass intelligent driving, TianShen’s Eye… any one of them costs a lot of money.

In 2025, the proportion of capitalized R&D investment increased from 1.78% to 8.61%. While it beautifies the current-period profit, it also increases pressure from amortizing future intangible assets.

It’s also worth noting asset impairment. In 2025, BYD’s credit impairment losses and asset impairment losses together totaled about 2.2 billion yuan. Compared with about 5.4 billion yuan in 2024, that’s a reduction of roughly 3.2 billion yuan, which also helps to some extent to “shape” the profit.

Based on this, BYD’s overall gross margin fell to 17.7% in 2025, the lowest in three years. Even the gross margin of its core automotive business also declined by 1.8 percentage points year on year.

In its financial report, BYD also admits that the ongoing price war in China’s auto market and a highly competitive environment are the main reasons squeezing automakers’ profitability.

03

Now let’s look at other financial indicators.

Operating cash flow is a core metric for measuring a company’s “cash-generating” ability. In 2025 BYD was 59.136 billion yuan, and in 2024 it was 133.454 billion yuan. That means BYD’s operating cash flow in 2025 was not only “cut in half,” but even more severe.

BYD’s annual report explains this as “an increase in cash paid for the purchase of goods and receipt of labor services.” Mi Mi’s translation is: either there’s more spending on raw material procurement, or the payment cycle to suppliers has shortened.

In June 2025, the newly revised “Regulations on the Payment of Small and Medium-Sized Enterprise Accounts” officially took effect, explicitly requiring large automakers to pay small and medium-sized enterprise accounts within 60 days from the date the goods are delivered.

Including BYD, more than ten automakers publicly committed afterward to compress payment terms to within 60 days.

On the financing cash flow side, BYD’s growth is a bit strong: it jumped from -10.268 billion yuan in 2024 to +104.614 billion yuan in 2025.

Of this 104.6 billion yuan, 40 billion yuan came from an H-share placement, and the bulk of the rest is from新增借款 (new borrowings).

There’s another detail worth pondering. BYD’s cash and cash equivalents dropped from 102.7 billion yuan to 75.4 billion yuan, down 27.3 billion yuan. At the same time, the board of directors authorized the use of no more than 60 billion yuan for entrusted wealth management…

In summary, BYD’s 2025 performance is indeed somewhat contradictory.

On one hand, technological reserves, a brand matrix, and global expansion—these truly form a solid moat. On the other hand, falling profitability and the financial leverage also make the company look somewhat fragile. So, in short: “the throne is already secure, but the crown is becoming heavier.”

At the start of 2026, BYD also seems to be under some pressure: it lost the top spot in automaker sales it had held for a long time, and in the first two months its cumulative domestic sales were surpassed by Geely Automobile. Especially in January, domestic insurance-covered sales plunged 62% year on year, and its market ranking slid to fourth place.

Moreover, starting in 2026, the policy on the purchase tax for new-energy vehicles will shift from full exemption to half collection, directly increasing consumers’ vehicle-buying costs.

No matter what, as a global leader in new-energy vehicles, BYD at least holds the bottom line of revenue growth scale. Its logic for growth has changed; the pains of 2025 may well be the necessary ordeal for BYD to go from “big” to “strong.”

This article is for discussion and analysis only and does not constitute investment advice. All images not marked in this article are from companies or publicly disclosed sources; this is hereby stated and thanks are given!

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