From 100,000-Car Order to 55% Profit Plunge: BYD’s Conflicting Signals

BYD's Q1 net profit fell 55% amid price war; counters with 100k EV fleet deal, LiDAR Seagull, and 100k Tang pre-orders. Analysts split.

BYD heads into the new trading week with a banner batch of positive news — yet the market’s attention is stubbornly fixed on the numbers that are moving in the wrong direction. The Shenzhen-listed shares closed at 100.02 yuan on May 8, while the Hong Kong-listed H-shares ended at 99.75 Hong Kong dollars, barely budging. That tight range reflects a bigger standoff: between a flurry of deal-making and product launches on one hand, and a brutal profit squeeze on the other.

The quarterly earnings landed with a thud. First-quarter revenue fell 11.82% year-on-year to 150.23 billion yuan, and net profit attributable to shareholders tumbled 55.38% to 4.08 billion yuan. Operating cash flow shrank by more than two-thirds. The price war in China’s home market, aggravated by rivals like Xiaomi and Geely, has pushed discounting to levels not seen in two years — and BYD is caught defending market share while trying to preserve per-vehicle margins.

That tension is now front and centre for analysts, who remain sharply divided. Goldman Sachs holds a target of 134 Hong Kong dollars and sees the first quarter as a potential trough for both sales and earnings. Citigroup is even more bullish at 142 Hong Kong dollars, betting on stronger overseas volumes and more stable domestic pricing. BNP Paribas, however, cuts the other way, setting a target of 87 Hong Kong dollars and warning of further pressure on earnings estimates.

Technically, the stock is wedged between support at 96.83 Hong Kong dollars and the next resistance at 105.12, the classic pivot level. A slip below the 200-day moving average around 99.64 would test the lower boundary.

The deal machine keeps rolling

Against the weak earnings backdrop, BYD has been busy signing contracts that underscore its long-term ambitions. Over the weekend, the company inked a framework agreement with Car Inc, China’s largest direct-operating car rental firm, to supply 100,000 electric vehicles for fleet electrification. The partnership also covers installation of BYD’s “Flash Charging” superchargers at rental locations nationwide.

That charging network is expanding fast: already 5,924 stations are live across 311 cities, the companion app has surpassed one million downloads, and more than 21 million kilowatt-hours have been dispensed in the past two months. The company’s stated goal of 20,000 stations by year-end 2025 remains an ambitious target.

Meanwhile, the 2026 BYD Seagull goes on sale Monday (May 11) as the first micro-EV in the A00 segment to feature a roof-mounted LiDAR sensor for driver-assistance systems. Priced between 65,000 and 80,000 yuan, its range jumps to 505 kilometres from the previous 405. The flagship SUV, the Great Tang, is also drawing enthusiasm; since its debut at the Beijing auto show, BYD has secured more than 100,000 pre-orders in just two weeks.

Export engine hums, but labour clouds gather

International markets are providing the strongest counterweight to domestic malaise. In April alone, BYD delivered 321,123 new-energy vehicles, a month-on-month increase despite a weaker year-on-year comparison. Exports reached roughly 135,000 units, a gain of about 70% from a year earlier. And in the United Kingdom, BYD confirmed on May 5 that it is the best-selling EV brand for the first part of 2026, with more than 12,700 vehicles delivered.

JPMorgan expects Chinese automakers to capture a 20% market share in Western Europe by 2028, with BYD playing a central role. The company is not just exporting but also building local production — though that effort faces fresh questions. At the Szeged plant in Hungary, workers have complained of seven-day workweeks and shifts exceeding 12 hours. China Labor Watch interviewed 50 employees at the site, which is designed for an eventual annual capacity of 300,000 vehicles.

The controversy is compounded by the involvement of Jinjiang Construction, whose subsidiary was linked to a labour rights case at BYD’s Brazil plant, where authorities described conditions as “slavery-like.”

Later this month, April sales data will offer the next clue on whether export growth and blockbuster deals like Car Inc can meaningfully overshadow the profit pressures at home. BYD’s annual general meeting in early June will also give management a chance to address capital needs and the next phase of expansion — and to explain how the company plans to square its soaring volume with a shrinking bottom line.