BYD's first-quarter 2026 results, reported April 28, told a story its own 2025 numbers had not prepared investors for: vehicle sales down 30 percent year over year to 700,463 units, revenue down nearly 12 percent to 150.23 billion yuan, and net profit down 55.38 percent to 4.09 billion yuan — about $594 million — the steepest quarterly decline the company has posted in six years. It came just weeks after BYD had reported a record 803.97 billion yuan in full-year 2025 revenue, roughly $113 billion. Even that record year carried a warning sign easy to miss at the time: full-year net profit had fallen 19 percent even as revenue hit an all-time high, as gross margins slid from 19.44 percent to 17.74 percent. The company that built its rise on undercutting China's other automakers on price is now watching that same price war cut into its own numbers.
BYD did not stumble into that war. In May 2025, the company cut prices on more than 20 models, reigniting a discounting battle that had simmered since 2023. Great Wall Motor's chairman, Wei Jianjun, responded publicly that "an 'Evergrande-like' crisis already exists in the automotive industry" — an unusually blunt comparison to the property developer whose collapse became shorthand for reckless, debt-fueled overexpansion. China's Auto Dealers Association estimates the price war destroyed roughly 471 billion yuan, about $69 billion, in industry revenue between 2023 and 2025, with average vehicle prices falling 11 percent over the period. Beijing banned below-cost sales in February 2026, but discounting continued regardless, and BYD — the company with the deepest vertical integration, making its own batteries, chips and motors — was better positioned than most rivals to absorb the damage. Better positioned did not mean immune, as the first-quarter numbers showed.
China's Largest Automaker, Chasing a Number It May Not Reach on Schedule
BYD sold 4.6 million new-energy vehicles in 2025, up 7.73 percent, with overseas sales more than doubling to 1.05 million units, up 145 percent — clearly the healthier part of the business. But at home, Volkswagen's China joint venture reclaimed the top spot in domestic car sales in January and February 2026 as Beijing rolled back EV subsidies, pushing BYD down to fourth place with just 7.1 percent share, its worst domestic slide since the pandemic. That domestic wobble sits awkwardly next to chairman Wang Chuanfu's stated ambition, laid out at BYD's shareholder meeting on June 9, 2026, of overtaking Toyota to become the world's largest automaker by volume by 2030.
"I believe BYD will achieve significant growth by 2030." — Wang Chuanfu, BYD chairman, shareholder meeting, June 9, 2026
Bloomberg Intelligence analysts have been openly skeptical of the timeline, noting BYD ranked fifth globally in 2025 with 4.6 million vehicles against a Toyota volume several times larger. Exports — up 55.84 percent in the first quarter alone, now representing 46 percent of BYD's total sales — are doing more of the growth work than the shrinking domestic market, which raises the question of how BYD builds its overseas manufacturing base fast enough to support that ambition without triggering the same trade friction its Chinese EV peers have already run into in Europe and the United States.
The Reputational Bill Coming Due Abroad
That friction has already arrived, on two continents, in forms more serious than tariffs. In December 2024, Brazilian labor authorities raided BYD's construction site in Camaçari, Bahia, and found 163 Chinese workers in what officials described as slavery-like conditions — confiscated passports, confined dormitories, withheld wages. BYD signed a 40 million-reais conduct agreement with Brazilian authorities in January 2026, yet in April 2026 Brazil's Labor Ministry added the company to its official "dirty list" of employers linked to forced labor anyway, a designation that restricts BYD's access to certain Brazilian bank financing even though the plant itself, opened in October 2025 with a 5.5 billion-reais investment, continues operating.
A strikingly similar pattern has since surfaced in Europe. A report published in April 2026 by China Labor Watch, based on interviews with 50 workers and three site visits since October 2025, alleged seven-day work weeks, twelve-to-fourteen-hour shifts, wages withheld at 20 to 30 percent, debt bondage tied to recruitment fees, and workers coached to mislead Hungarian labor inspectors at BYD's Szeged plant — built by a contractor, AIM Construction Hungary, that is a subsidiary of the same Jinjiang Construction Group implicated in the Brazil case. A worker died at the Szeged site in February 2026, and county labor authorities are investigating. Three members of the European Parliament have formally questioned the European Commission about the allegations — reportedly the first time a Chinese company's labor practices have been raised in that forum. BYD has separately faced a subtler European headache: its planned €4 billion Hungary factory has been delayed and is running well below its planned 150,000-unit capacity, partly because BYD has redirected momentum toward a Turkey plant that will exceed Hungary's output by 2027 — a shift driven largely by the European Union's 27 percent combined tariff on Chinese-made EVs. In June 2026, BYD was also added, alongside Alibaba and Baidu, to the Pentagon's list of firms it says are linked to China's military — a designation BYD called unjustified in a Hong Kong exchange filing, adding it expected no effect on business outside its dealings with the US Defense Department.
Wang Chuanfu's 2030 target requires BYD to keep growing everywhere at once: at home, against a price war it started and now cannot easily stop; abroad, fast enough to matter, but not so fast that labor practices and trade barriers catch up with the expansion first. The first quarter of 2026 suggests the domestic half of that equation is already straining. Whether the export growth and the reputational costs trailing it in Brazil and Hungary can be managed well enough to keep the 2030 ambition alive, rather than becoming the story that defines BYD's decade instead, is the question the company's next few quarters will start to answer.