BYD’s Two-Speed Reality: Record Orders for New Models as Short-Term Debt Balloons

BYD's Q1 net profit drops 55% to 4 billion yuan as price war intensifies, while short-term liabilities jump 72%. The EV giant raises ADAS prices and pushes upmarket with new flagship SUV.

The numbers coming out of BYD’s first quarter tell two very different stories. On one hand, the Chinese EV giant is fending off intense competition at home with aggressive pricing and fresh product launches. On the other, its balance sheet is showing real strain, with short-term liabilities leaping 72% to 66.3 billion yuan (roughly $9.7 billion) in just three months.

The Song Ultra, launched on March 26 at a starting price of 151,900 yuan (around $22,000), drew 61,240 orders in its first month. The model features BYD’s latest Blade Battery 2.0 with fast-charging capability—enough to deliver a meaningful charge in five minutes. Buyers can choose between a 68.4 kWh pack offering 605 km of range and a 82.7 kWh version good for 710 km. Roughly 70% have opted for the larger battery. In the three days following the launch, foot traffic at BYD showrooms jumped 40%.

Yet the headline-grabbing order numbers mask a deepening margin problem. Net profit for the first quarter plunged 55% year-on-year to around 4 billion yuan—the weakest result in more than three years. Revenue dropped 11.8% to 150.2 billion yuan, marking the third consecutive quarterly decline. The automotive segment alone saw a 16% revenue slide, squeezed by weak domestic demand and currency headwinds.

The price war shows no sign of easing. Rivals including Xiaomi and Geely have forced BYD to offer steeper discounts, and in March rebates hit a two-year high, according to Bloomberg. Four straight quarters of falling earnings confirm the trend: margins per vehicle are shrinking.

A Pivot on Pricing for Intelligence

In an unusual move, BYD is raising the price of its driver-assistance package even as it cuts vehicle prices. Starting May 1, the LiDAR-equipped “God’s Eye B” system will cost 12,000 yuan—a 21% increase. The company blames surging costs for memory hardware, with DRAM contract prices climbing nearly 90% in the first quarter. Customers who put down a deposit by April 30 still lock in the old rate.

The increase marks a strategic shift. In February 2025, BYD rolled out ADAS updates across 21 models simultaneously, positioning smart driving features as a standard offering rather than a paid upgrade. Now, with 2.85 million vehicles already equipped and generating over 180 million kilometers of driving data daily, the company is testing whether its ecosystem can become a genuine revenue stream.

BYD’s pricing remains well below competitors. Tesla charges 64,000 yuan for its Full Self-Driving package in China—more than five times BYD’s new price. XPeng, which had offered its ADAS system as standard since mid-2022, reintroduced paid packages earlier this year. Its “Ultra SE” system is priced at exactly 12,000 yuan, matching BYD’s new level.

Premium Ambitions and Export Momentum

To escape the domestic price war, BYD is pushing upmarket. On April 24, it opened pre-orders for the Great Tang, a flagship SUV under the Dynasty lineup priced between 250,000 and 320,000 yuan. Within 24 hours, more than 30,000 orders came in; some Chinese media reports suggest the total reached 60,000 within 48 hours. The SUV features the second-generation Blade Battery, a 1,000-volt architecture, and an all-wheel-drive version producing up to 585 kW, capable of sprinting from 0 to 100 km/h in 3.9 seconds.

The export business is providing a more immediate buffer. BYD sold 321,165 vehicles overseas in the first quarter, a 56% jump from a year earlier. That represents nearly 46% of its total EV sales. In March, the company exceeded 100,000 monthly exports for the fifth consecutive month. Management has raised its 2026 export target to 1.5 million units.

At the Hong Kong Stock Exchange, BYD shares rose 1.61% to HK$107.50 on Wednesday, recovering slightly from a 2.2% drop the previous day when the quarterly results landed.

Whether premium models and overseas growth can offset the margin erosion at home is the central question. The second-quarter numbers, expected around mid-2026, will show whether the Great Tang converts its pre-orders into deliveries—and whether BYD’s two-speed strategy can hold together.