BYD Slashes 2025 Sales Target to 4.6 Million Vehicles

BYD Company Limited has slashed its 2025 sales target to 4.6 million vehicles, down from the previous goal of 5 million. The company's net sales are comprised of 53.4% electric vehicles, 38.7% mobile telephone components, and 7.6% rechargeable batteries. China, Hong Kong, Macau, and Taiwan account for 61.5% of net sales.

BYD Company Limited has announced a significant reduction in its 2025 sales target, slashing it from 5 million vehicles to 4.6 million. This move comes amidst a challenging market environment, marked by increased competition and regulatory pressures. The company's net sales are predominantly composed of electric vehicles (53.4%), mobile telephone components (38.7%), and rechargeable batteries (7.6%). The Asia-Pacific region, particularly China, Hong Kong, Macau, and Taiwan, accounts for 61.5% of BYD's net sales [1].

The company's decision to lower its sales target reflects its response to various industry challenges. BYD's Q2 gross profit margin reached its lowest level since Q3 2022, at 16.3%, due to heightened competition and restrictions on promoting autonomous driving technology. Additionally, the company's net profit fell by 29.9% year-on-year to 6.4 billion yuan, despite a 14% revenue increase to 200.9 billion yuan. This decline is attributed to margin compression from aggressive price cuts and regulatory pressures, particularly in the hyper-competitive EV market [2].

The intense price war in the EV sector has driven gross margins to 10–15%, below Tesla's 18%, while EU tariffs and China's self-regulation rules have forced BYD to shift toward plug-in hybrid electric vehicles (PHEVs). The company's debt-to-asset ratio reached 71.1% in Q2 2025, while a working capital deficit expanded to 122.7 billion yuan. To mitigate these risks, BYD plans to reduce excess inventory by 20–30% by Q3 2025 and localize production in Hungary, Thailand, and Mexico. However, geopolitical tensions and trade restrictions remain significant headwinds [3].

Despite these challenges, analysts remain optimistic about BYD's prospects. The company's strong earnings momentum, a healthier balance sheet post-FanDuel sale, and a robust development pipeline position it for continued growth. Analysts have raised their estimates for Boyd Gaming across all time frames since the earnings report. For the current quarter, estimates have been lifted from $1.46 to $1.55, a 6% increase. For the current year, estimates have been raised 6%, from $6.49 to $6.89. Looking at the big picture, estimates have been lifted from $6.73 to $7.59, a 13% increase [4].

References:
[1] https://www.ainvest.com/news/byd-shares-plummet-weaker-expected-earnings-narrowing-profit-margin-2509/
[2] https://www.ainvest.com/news/byd-profit-decline-risks-uncontrolled-chinese-ev-price-war-assessing-sustainability-high-stakes-growth-strategy-2509/
[3] https://techbuzzchina.substack.com/p/from-scale-to-strength-can-byd-win
[4] https://www.euromonitor.com/article/bmw-byd-tesla-and-vinfast-are-recalibrating-their-ev-strategies