BYD's Two-Speed Expansion: Record Exports Meet Payment Backlash as Half-Year Report Looms

BYD's exports soar 124% in July, but German dealer payment disputes and a 40% domestic sales drop cloud its half-year results due Friday.

The showroom floor in Chengdu told one story this week: BYD unveiled its new "Da Han" flagship sedan with a 1,008-kilometre CLTC range and fast-charging technology that promises five minutes of replenishment, alongside the third-generation Tang SUV slated for a fourth-quarter 2026 launch. The stock market responded with a 2.0 percent gain on the opening day of the auto show.

But behind the glitz of the model blitz sits a messier reality. German dealers have gone public this week with complaints about BYD's payment practices, with the head of the BYD Partner Association saying the company's payment discipline falls short of what partners at other brands are accustomed to. Outstanding sums in the six-figure range are reportedly not uncommon. XPeng, BYD's fellow Chinese expansionist, faces similar grievances — one German dealer said he waited more than six months for contractually agreed leasing subsidies and quarterly bonuses.

The timing is awkward. BYD releases its half-year results this coming Friday, and the narrative around those numbers is already split between record international momentum and mounting domestic pressure.

Export Engine Humming, Home Market Stalling

The international picture remains the bright spot. BYD delivered roughly 180,000 vehicles outside China in July, a 124 percent jump year-on-year, while first-half overseas sales topped 790,000 units — up more than 70 percent. The export share of total sales climbed to about 44 percent in the first half.

At home, the contrast is stark. BYD sold just over one million vehicles in China during the same period, nearly 40 percent fewer than a year earlier. CPCA data shows BYD captured a 21.1 percent share of the domestic electric and hybrid market in the first half, well ahead of Tesla's 5.1 percent — but the Chengdu market itself offered a warning: BYD reclaimed the monthly crown in July with 3,548 units, yet lost the first-half city title to Geely Auto, which sold 21,800 units versus BYD's 21,400.

Geely's second-quarter revenue of 89.8 billion yuan, up 14 percent, provides an uncomfortable benchmark for BYD's competitiveness as the domestic price war grinds on.

Infrastructure Growing Pains

The payment disputes in Germany expose a structural weakness in BYD's rapid European expansion. The company's infrastructure has not kept pace with its sales ambitions, and the problem extends beyond dealer payments. Vice President Stella Li confirmed that production at the Szeged plant in Hungary will now begin in the fourth quarter of 2026 — originally slated for late 2025, then pushed to mid-2026 — while work on a planned Turkish factory in Manisa, announced with a $1 billion investment in 2024, has been paused with no new timeline.

Analysts have nevertheless been revising their outlook upward. A mid-August update lifted the consensus price target to HK$177 from HK$161, following an increase in the 2025 earnings-per-share estimate from 6.08 to 6.71 Chinese yuan. The consensus EPS estimate for the upcoming reporting quarter stands at $0.102.

The Bull and Bear Case

For bulls, the export trajectory is the story. If the 124 percent July growth rate can be sustained and the half-year figures confirm the momentum, the recent recovery in the stock has room to continue. The product offensive — Da Han, the new Tang, and the Denza N8 with "Blade Battery 2.0" technology and over 1,000 kilometres of range — demonstrates that BYD remains at the technological forefront. A share buyback programme of 400 million yuan signals management's belief that the stock is undervalued, and the regular final dividend for fiscal 2025 has already been paid out.

The bear case centres on the domestic market. Losing the first-half crown in Chengdu to Geely is more than a footnote — it shows that leadership in China's mass market is no longer a given. If the price war visibly compresses margins in Friday's report, the market may discount the strong export figures. There is also the risk of cannibalisation among BYD's own brands and high launch costs for new models like the third-generation Tang, which could weigh on profitability in the near term rather than support it.

A Stock Still Below Its Peak

The shares closed Friday at €10.13, up 2.0 percent on the day and 3.8 percent on the week. Yet the stock remains 5.4 percent in the red for the year and sits roughly 23 percent below its 52-week high of €13.23.

Friday's half-year report will determine which narrative prevails: the export-driven growth story or the margin squeeze at home. The scheduled fourth-quarter launch of the new Tang SUV will then test whether the model offensive can reclaim ground in the domestic market. For now, BYD's international success and its operational growing pains are advancing on parallel tracks — and the question is whether the former can continue to outrun the latter.