BYD Pushes Prices Higher and Eyes Formula One as Profit Crunch Forces a Strategic Rethink

BYD raises driver-assistance system price amid surging lithium and DRAM costs; net profit plunges 55%. The EV giant eyes Formula 1 for global tech credibility and upmarket shift.

The Chinese electric-vehicle giant has started charging more for its optional driver-assistance package, a small but symbolic move that underscores the deeper pressures shaping its next chapter. Since 1 May, the "God's Eye B" system with LiDAR has cost 12,000 yuan, up from 9,900 yuan — a 21 per cent increase blamed on rising storage-hardware costs. Behind that single price tag lies a broader story of margin erosion, industry-wide price adjustments, and a company weighing whether the global stage of Formula 1 can help it escape the squeeze.

BYD's decision to lift the price of an optional feature reflects a wider shift in China's new-energy vehicle market. More than ten large automakers have raised selling prices by 2,000 to 10,000 yuan across nearly 20 models since early May, abandoning the relentless discounting that had defined the sector. The increases are coordinated, publicly communicated and effective immediately — a departure from the quiet dealer-level rebates of recent months. For BYD, the God's Eye hike is a test of whether customers will pay more for advanced technology, a question that matters as the company tries to shift its revenue mix toward higher-margin equipment.

The cost pressures forcing these moves are stark. In the first quarter of 2026, BYD's net profit plunged 55 per cent from a year earlier, while revenue slid to around 150 billion yuan. The culprit is soaring input costs: lithium carbonate has surged 125 per cent to 200,000 yuan per tonne, and DRAM memory chips have jumped 180 per cent. The company sold roughly 321,000 new-energy vehicles in April, up from March but still 15.5 per cent lower year-on-year — the eighth consecutive month of declining annual comparisons. Even as the top line struggles, BYD's installed base of God's Eye vehicles has swelled to more than 2.99 million, generating over 190 million kilometres of real-world driving data daily, which strengthens the case for monetising its software.

It is against this backdrop that BYD is exploring a move into Formula 1 — an initiative that looks less like a marketing stunt and more like a strategic bid for global technological credibility. Talks are centring on Christian Horner, the former Red Bull Racing team principal, who met BYD vice-president Stella Li for two days in Cannes in May, shortly after his non-compete clause expired on the 8th. Two options are on the table: a 24 per cent stake in the Alpine team, currently held by Otro Capital, or a far more ambitious plan to field its own factory team as an additional entrant. The latter would allow BYD to showcase its battery and hybrid expertise under its own banner, a move the FIA is said to welcome as it seeks more Chinese manufacturers in the sport.

The Formula 1 push dovetails with BYD's broader efforts to move upmarket. Its Denza brand, fully acquired from Mercedes-Benz in September 2024, is targeting 15 per cent of group revenue by the fourth quarter of 2026. The Denza N9 SUV, with 870 hp and a combined range of roughly 1,302 kilometres, is the flagship of that ambition. A factory team in motorsport would reinforce the same message: BYD wants to be seen as a technology leader, not just a volume player.

Overseas, the company continues to rack up gains that offset some of the domestic gloom. In South Korea, BYD has climbed to fourth place among imported brands, behind only Tesla, BMW and Mercedes-Benz. Between January and April 2026, it sold 5,991 vehicles there — a surge of 983.4 per cent year-on-year. The BYD Seal has been the star, with monthly sales rising from 51 units in January to 207 in April. In Australia, regulators have approved two new models: the Seal 7, a plug-in hybrid saloon with a turbo engine and electric drive producing 197 kW, and the V9, a large electric van with a 150 kW rear motor and up to 17.9 cubic metres of cargo space.

Shareholders will collect a dividend of 0.358 yuan per share, with the ex-dividend date set for 11 June 2026. But the real focus is on whether the current price increases — both on optional equipment like God's Eye and on the base models across the industry — will hold. If BYD can raise the cost of a technology package without denting demand, it will signal that the market's most aggressive phase of price competition may be fading. The second-quarter earnings will deliver the first real verdict.