BYD Faces Pivotal Moment Amid Diverging Domestic and International Fortunes

BYD's exports surpass domestic sales for the first time as it faces a 41% global sales drop in China. The board meets to finalize 2025 results and dividend.

BYD's board is set to convene on March 27 to finalize its 2025 annual results and determine a final dividend. This meeting arrives at a critical juncture for the Chinese electric vehicle (EV) giant, which is navigating mounting pressures in its home market even as its overseas shipments have, for the first time, surpassed domestic sales.

A Tale of Two Markets: Export Strength vs. Domestic Headwinds

The company's global performance is increasingly split. February saw a landmark shift: BYD's exports exceeded its domestic vehicle sales for the first time. Overseas deliveries reached over 100,600 units, marking an increase of approximately 50%. In Europe, BYD even overtook Tesla in new car registrations for January. The automaker has set an ambitious export target of 1.3 million units for 2026 and plans to expand its German dealership network to more than 350 locations by the end of that year, aiming for annual sales exceeding 50,000 vehicles in Germany alone.

This international success contrasts sharply with conditions in China. BYD's global sales in February plummeted by 41% year-over-year, representing the steepest decline since February 2020 and the sixth consecutive month of falling sales. Plug-in hybrid models were hit particularly hard, recording a 44% drop.

Structural challenges are intensifying the domestic squeeze. A new 5% purchase tax on electric vehicles took effect in China at the start of 2026, coinciding with the expiration of previous subsidy programs. According to the China Passenger Car Association, BYD's market share in China has contracted from 35% in 2023 to 29% for the first eleven months of 2025, signaling a significant escalation in competitive intensity within the Chinese EV sector.

Financial Performance and Valuation Metrics

For the first nine months of 2025, BYD reported revenue of approximately 566 billion yuan, a 12.75% increase from the prior-year period. However, this growth decelerated to its slowest pace in five years. Profits declined in both the second and third quarters of 2025.

Despite these challenges, BYD sold around 4.6 million all-electric and hybrid vehicles in 2025, maintaining its position as the world's largest manufacturer of electric vehicles.

The company's shares are currently valued at a price-to-earnings (P/E) ratio of 20.98 and a price-to-sales (P/S) ratio of 0.98. Based on a share price of HK$96.95 as of March 10, the last paid dividend of HK$4.34 per share implies a dividend yield of 4.47%. Shareholder payouts have been raised for three consecutive periods.

Strategic Moves: Technology Push and Global Manufacturing

In early March, BYD unveiled its "Blade Battery 2.0" at a technology event in Shenzhen. The new battery boasts a 5% higher energy density than its predecessor alongside improved longevity and safety. A compatible vehicle is claimed to charge from 10% to 70% in five minutes, and to 97% in nine minutes.

Complementing this, the company introduced "Megawatt Flash Charging 2.0," a system with a peak power output of up to 1,500 kW per charging point. It is designed to replenish roughly 400 to 500 kilometers of range in about five minutes, with installation costs purportedly around 60% lower than conventional systems. BYD aims to establish 20,000 fast-charging stations across China by the end of 2026, with over 4,200 already operational.

The path to global expansion is not without obstacles. Since January 2026, Mexico has raised import tariffs on passenger cars from 20% to 50% for countries without a free trade agreement. In response, BYD is among the parties interested in a former Nissan-Mercedes plant in Mexico, exploring options to establish local production.

Analysts are watching closely to see if international growth can offset domestic softness. Deutsche Bank projects that BYD could sell approximately 4.9 million vehicles in 2026. The annual figures released on March 27 will provide crucial evidence on whether the export engine is powerful enough to compensate for the weakness at home.