The world’s largest electric car manufacturer BYD is threatened with a real crisis. The group’s sales fell by 30 percent to 210,000 vehicles in January compared to the same month last year, the company announced. It was the fifth consecutive month of declining sales. The company’s share price fell almost seven percent in Hong Kong. Since its peak in May, the share price has lost more than two-fifths of its value. In January, BYD lost the crown as China’s strongest-selling car manufacturer, which the company had won from Volkswagen some time ago. Instead, Geely took the lead. The group is not only behind brands like Volvo, Zeekr and Geely. He is also a major shareholder in Mercedes. Geely increased its sales against the trend by 1.3 percent to 270,000 cars. BYD is increasingly seeking salvation abroad. The group sold almost 100,000 vehicles abroad in January, almost half of its total sales. In 2026, the company plans to sell 1.3 million cars abroad, around a quarter more than in the previous year. The background to the sharp decline in January is that support measures expired or were adjusted at the turn of the year. A kind of scrapping bonus ended in many cities. The VAT for many electric cars has been raised from zero to five percent. Many customers have therefore brought forward their car purchase. This hit BYD particularly hard. Other manufacturers also recorded declines, but only VW partner Xpeng was hit as hard as BYD. Aggressive expansion and low sales figures In addition, the date of the Chinese New Year usually leads to distortions in the first few months of a year. These holidays, which are comparable in importance to the German Christmas, fall entirely in February this year. Last year the festival started at the end of January. Some Chinese observers therefore wrote that the loss would probably have been even greater without this effect. For BYD, the disproportion between aggressive expansion and low sales figures is becoming ever greater. The company is investing heavily in new factories, both in China and abroad. It also now maintains its own fleet of ships. In contradiction to this expansion, sales figures have been falling since July compared to the same month of the previous year. More on the topic The group has missed its target of selling 5.5 million vehicles for 2025. Instead, 4.6 million cars went to customers around the world. Although that meant an increase of almost eight percent compared to 2024, growth of almost 30 percent was planned. Industry observers have long been skeptical about the situation at BYD. This usually happens behind closed doors. But Wei Jianjun, head of competitor Great Wall Motors, had already caused a stir in May when he warned that there was already an “Evergrande” in the car industry, it just hadn’t collapsed yet. Once the market leader in the real estate industry, Evergrande collapsed spectacularly half a decade ago. The statements were interpreted to mean that he must have meant BYD. BYD rejected the allegations and described the discussion as silly. The situation is similar to that in the real estate industry in that the trigger is also Beijing’s measures in the auto industry. In the real estate industry, the government had tightened the debt rules for corporations. In the auto industry, Beijing cracked down on overly aggressive discounts and required manufacturers to pay their suppliers more quickly. Since then, BYD’s expansion has stalled. Before that, the company from Shenzhen in southern China had driven its competitors ahead of itself with ever new price rounds.
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