BYD profit rises for first time in 5 quarters on overseas growth, pointing the way out of China car slump

BYD, the world's largest electric-vehicle maker, reported a rise in profit for the first time in five quarters, thanks to a surge in overseas revenue. In the latest period for which sales data is available, which ended in July, BYD's overseas revenue exceeded its domestic sales in China for the first time. This marked a significant milestone in the company's prolonged profit slump, which has persisted for over a decade.

In the first half of the current year, BYD's overseas sales rose 34% to 181.3 billion yuan, accounting for 53% of the total, while sales in Greater China shrank 31%. This overseas growth has been crucial for BYD as the Chinese market has become increasingly brutal, with annual vehicle sales outnumbering those in the US by nearly two-to-one.

BYD's CEO stated that the company expects its overseas growth momentum to continue. This shift towards overseas markets has been observed in other foreign carmakers, such as Volkswagen and Mercedes-Benz Group, which have also struggled in the Chinese market. Chinese consumers are now considering foreign cars as overpriced and outdated.

The drop in sales at home has been attributed to price cuts and increased scrutiny from Beijing. However, overseas markets have provided a much-needed growth driver for Chinese carmakers, with July being an exception, as total overseas sales of passenger vehicles from China surged 88% in July. Despite challenges, analysts predict that BYD's earnings rebound will accelerate through the end of 2026, driven by the success of overseas markets.