BYD - The Moment of Truth: Analyzing the 2025 Transition
- Administrateur
- Dec 14, 2025
- 2 min read
As we close out 2025, Build Your Dreams' (BYD) performance marks a historic turning point in the automotive industry. After a period of hyper-growth that saw the company defy economic gravity until 2024 (peaking in Q4 2024 at 1.52 million units), the Shenzhen giant is facing its "new normal." Cumulative figures for the first three quarters of 2025 confirm what analysts feared: the Chinese market has hit its glass ceiling, and the international growth driver is facing geopolitical headwinds. BYD is no longer an explosive "growth stock," but an industrial "value stock" in a consolidation phase.
Retrospective: Foundations of Hegemony (2019-2024)
To understand the current slowdown, we must recall how BYD maintained a 60% CAGR until 2024. This performance relied on an unmatched industrial architecture:
Total Vertical Integration: By controlling 100% of the value chain (from lithium to microchips), BYD absorbed the price war of 2023-2024 while competitors burned cash.
Blade Battery Technology: This differentiator allowed for safer, cheaper vehicles, flooding the domestic market. This ultra-competitive cost structure enabled BYD to reach the dizzying height of 4.27 million sales in 2024.
2025 Analysis: Domestic Saturation is a Reality
It is December 12, 2025, and trends observed year-to-date validate the saturation thesis. Sequential analysis of 2025 quarters shows an inability to return to the record levels of late 2024.
Contraction of the Chinese Market: The pullback is structural. Comparing Q3 2025 to Q3 2024, the figures are stark: sales in China dropped from 1.03 million to 868,000 units, a decline of roughly 16%. The price war has ceased to stimulate demand; it is now merely eroding margins. The Chinese NEV (New Energy Vehicle) market has matured, saturated by a plethora of supply (Xiaomi SU7, Huawei models).
Exports: Success Tempered by Geopolitics The "Go Global" strategy worked, but not enough to offset the domestic decline. Exports surged, reaching 246,000 units in Q3 2025 (up from 100,000 a year earlier). However, the group's total volume in Q3 2025 (1.11 million) remains lower than that of Q3 2024 (1.13 million). This export growth, while vigorous (+146% by volume), was braked by tariffs implemented by the EU and continued tensions with North America. Local factories (Hungary, Brazil) are just beginning to come online and have not yet fully impacted 2025 volumes.
2026 Outlook: Towards a Profitability Model
For the coming year, the investment thesis on BYD must pivot. The focus is no longer volume, but product mix and operating margin.
Upscaling: With mass-market volumes slowing, BYD is betting everything on its premium brands (Yangwang, Fang Cheng Bao) to preserve earnings.
Industrial Internationalization: 2026 will be the year BYD must prove it can produce outside China with the same efficiency, a sine qua non condition to bypass protectionism.
Conclusion
As of December 2025, BYD remains a titan, but a less agile one. The transition from a conquest phase to managing saturation is confirmed. The decline in domestic volumes is the signal the market was waiting for to re-price the stock, not on hopes of infinite growth, but on its ability to generate free cash flow in a mature and hostile market.
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