BYD’s First-Half Profit Rises Despite Narrowing Margins

Chinese electric-vehicle giant BYD reported a 14% increase in net profit for the first half of 2025, even as concerns grow over whether the company can meet its full-year sales targets amid a challenging domestic market. The company announced Friday that net profit for the first six months rose to 15.51 billion yuan, roughly $2.18 billion, while revenue grew 23% from a year earlier, reaching 371.28 billion yuan.

Breaking down the figures by quarter, BYD posted 9.15 billion yuan in net profit during the first quarter and 6.36 billion yuan in the second quarter, falling short of the Visible Alpha consensus estimate of 11.94 billion yuan for the period. Revenue for the second quarter was 200.92 billion yuan, also below analysts’ expectations of 233.08 billion yuan.

The results come against a backdrop of weaker-than-anticipated sales in July, raising doubts about the company’s ability to hit its ambitious annual sales goal. Chinese automakers in general faced subdued sales last month, reflecting softening domestic demand. These challenges were compounded by Beijing’s efforts to reduce unhealthy competition in the EV market, which has made it harder for automakers to attract buyers while avoiding aggressive price cuts.

Margin Pressures from Competition

BYD’s margin also came under pressure in the first half of the year. The company’s gross margin declined to 18.01% from 18.78% a year earlier, largely weighed down by its EV operations. BYD has relied on targeted price cuts to maintain its market share in China, offering a broad lineup of vehicles to appeal to a wide range of customers. Regulatory measures aimed at curbing excessive capacity and discouraging price wars have added to the pressure on margins, challenging BYD and other domestic manufacturers to balance competitiveness with profitability.

Globally, BYD’s performance highlights the company’s growing influence in the electric-vehicle market. As it expands beyond China, BYD faces competition from established EV players in Europe, North America, and other regions. Maintaining profitability while scaling production internationally will be key to sustaining its position as one of the world’s largest EV makers, even as global demand for electric vehicles continues to rise.

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