BYD Profit Slips But European EV Sales Onslaught Gathers Pace.
“Great charging infrastructure and cost efficiency would, in turn, support faster EV adoption and strengthen BYD’s competitive position,”
Chinese electrified vehicle maker BYD, which wants to beat Volkswagen and Toyota and become the world’s biggest automaker, suffered a rare setback last year when its earnings fell nearly 20%, but Europe remains a prime target.
BYD, with its first drop in profits for four years, was suffering from the intense competition in the Chinese EV market. This has big implications for automakers in Europe, where the likes of BYD, Leapmotor, Chery, SAIC’s MG, Chery and now Geely are winning EV sales from the locals, not least because of their 30%-plus advantage in efficiency. Globally, BYD sales comprise about half EV, half plug-in hybrid. The company has stopped making gasoline and diesel vehicles
In the first quarter of 2026, early unofficial estimates suggest the Chinese EV market share in Europe had risen to close to 10%. BYD was on top, with about 7%, followed by SAIC’s MG to 3%, Geely including Polestar and Zeekr 1 to 2%, and Chery 0.5% to 1%, including Jaecoo and Omoda. In 2025 Chinese EV market share was between 7 and 8% for about 230,000 vehicles.
Analysts say EV sales outside of China can generate net profits of up to $3,500 a car, up to four times as much as sales in China. Europe, where new EVs will be the only new car and SUV sales allowed by 2035, and market share is just over one fifth of the market currently, must seem like a license to print money for Chinese manufacturers.
Energy costs increase electricity prices too
In 2025, BYD’s net earnings fell 19% to $4.77 billion compared with the previous year. The net profit margin slipped to 4.1% from 5.2%.
In Europe, the oil price crisis was seen initially as a big boost to EV sales. But the overall sharp increase in energy costs means electricity prices are accelerating for gasoline and diesel too, according to Reuters BreakingViews column.
“But higher oil prices create new problems. For one, making a car is more expensive. For instance, costs for the aluminum, copper, lithium and memory chips needed for a single electric vehicle have risen 44% or roughly $1,000,” BreakingViews columnist Katrina Hamlin said, quoting investment bank UBS.
“Electricity prices rise along with oil. The impact is milder for both BYD customers and factories in China, which can lean more on renewable energy supplies. But in markets like Europe, energy prices are soaring, meaning it’s increasingly expensive to charge. Average wholesale electricity rates in Hungary, Italy and Romania climbed by at least 12% as of mid-March,” Hamlin said.
BYD includes solar power and storage
Investment researcher Bernstein pointed out that BYD not only makes EVs, but is in the solar charging business and energy storage. Bernstein pointed to a recent announcement by BYD of big claims in its charging ability.
“The company’s newest “flash charging” technology – 70% charge in 5 minutes and 97% in 9 minutes – builds on its vertically integrated ESS (energy storage systems). Adding solar generation could further enhance BYD’s charging by providing low-cost on-site electricity generation, lowering reliance on grid power and transmission costs,” Bernstein said in report.
“Great charging infrastructure and cost efficiency would, in turn, support faster EV adoption and strengthen BYD’s competitive position,” the report said.
Bernstein rates BYD shares “outperform”.
UBS said it expects BYD’s overseas business to remain strong in 2026 and reiterates its “buy” recommendation for the stock.
Overseas sales up 500,000 in 2026?
UBS said in a report.
“With a strengthening brand premium and healthy margins in overseas markets, coupled with lightning charging solutions as a competitive barrier, there are potential re-rating opportunities for BYD, in our view,” UBS said.
BYD has a long-term goal of reaching annual sales of 10 million, which would bring it close to the current leaders Volkswagen and Toyota.
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