BYD’s Luxury Gambit: A 1,000-HP Saloon Takes Aim at Porsche as Home Profits Evaporate

BYD unveils the Fang Cheng Bao Formula S to challenge Porsche Taycan, as domestic sales drop 26% and exports surge 60% in early 2026.

BYD is charging into the European luxury market with a 1,000-horsepower electric saloon, a high-stakes bet designed to offset a brutal profit collapse at home. The Chinese giant’s Fang Cheng Bao brand, until now known for rugged off-roaders, unveiled its new “Formula” series at the Beijing auto show, directly challenging the Porsche Taycan. The flagship Formula S rides on an 800-volt architecture with three motors and all-wheel drive, packing enough punch to rattle Stuttgart’s finest.

The timing is no coincidence. BYD’s net profit plunged 55% in the first quarter of 2026 to around four billion yuan (roughly $600 million), its steepest decline in six years. The culprit is a halving of government purchase subsidies for electric vehicles in China, which has sent domestic sales into a tailspin. In April, BYD delivered roughly 314,100 electric and hybrid vehicles in China, a 15.7% year-on-year drop. That marks the eighth consecutive month of declining home-market sales, with the first four months of 2026 totaling just over one million units — 26% fewer than the same period last year.

Yet the Fang Cheng Bao sub-brand is a rare bright spot. Sales surged to over 29,000 vehicles in April, nearly triple the year-ago figure. The Formula saloon, slated for a third-quarter 2026 launch, will be followed a year later by the Formula X supercar. Leaked interior images show a sporty cabin with a large infotainment screen and physical buttons, a nod to the tactile preferences of Western buyers. The Formula SL, a top-tier variant, is being positioned specifically for Europe and the Middle East, where established players like BMW and Mercedes have faced little Chinese competition in the premium segment.

The export push is already gathering pace. BYD shipped a record 135,098 vehicles abroad in April, up more than 70% year-on-year, with exports now accounting for about 43% of total sales. In the first four months, overseas deliveries hit roughly 456,000 units, a 60% jump. Europe has emerged as the star performer: new registrations in the EU, EFTA, and the UK soared more than 155% in the first quarter. According to a Bloomberg report, BYD may have even sought membership in the European Automobile Manufacturers’ Association (ACEA) in April.

But the export boom alone cannot mask the domestic pain. Rivals are exploiting BYD’s weakness at home. Leapmotor posted a record 71,387 deliveries in April, a 74% year-on-year surge, while Zeekr also hit all-time highs. Xiaomi and Geely have forced BYD into a cycle of price cuts that hit a two-year high in March, squeezing margins for four consecutive quarters. Higher hardware costs in the supply chain and the fading subsidy effect have compounded the pressure.

BYD is fighting back with technology. More than ten models now feature ultra-fast charging and the second-generation Blade battery. At the Beijing show, the new Great Tang — a seven-seat SUV starting at 250,000 yuan — racked up over 30,000 pre-orders on its first day. Yet analysts remain cautious. Eugene Hsiao of Macquarie Capital argues that BYD needs a sequential recovery in domestic sales in the second quarter and a sustainable market share rebound in the third to improve overall profitability. The export surge, while impressive, has not yet compensated for the home-market slide.

The Formula series represents a strategic pivot. BYD is no longer attacking established automakers solely on price; it is now targeting them on performance and prestige. Successfully exporting high-margin luxury EVs to Western markets is no longer optional — it is essential to cover the heavy development costs and cushion the profit collapse at home. The question is whether a 1,000-horsepower saloon can do what price cuts and record exports have not: reverse a deepening crisis.