BYD's "Double Life" Reveals the Cruelty of the Domestic Car Market

【Lead: May 2026, BYD delivered a sales report of over 380,000 units, among which overseas sales exceeded 160,000 for the first time; however, BYD's single-month sales historical peak remained at 514,800 units in December 2024, with 57,200 units exported that month. These two sets of data reflect that BYD, sitting in the top chair of the new energy sector, is undergoing structural changes. BYD that grabbed the export dividend, exports soared; meanwhile, the domestic car market is experiencing a change from incremental to stock even possibly to shrinking volume. Even BYD cannot escape the pain of involution, presenting the "double life" of the industry leader, half smooth, half rough.】

Author: Li Suwan

According to April imported new car registration data released by the Korean Association of Import Cars (KAIDA), Chinese brand registration volume surpassed Japanese brands in the South Korean market for the first time, ranking in the top three countries for imported car sales. Of note, BYD's sales of 2,023 units exceeded the combined sales of the three Japanese brands Lexus (1,079 units), Toyota (829 units), and Honda (66 units) (1,974 units). Korean media generally regard this ranking as an important signal of the shift in the structure of the imported car market in South Korea.

Directly raising the cloud sail to cross the vast sea, BYD's overseas market continued to maintain high growth in May this year. Passenger cars and pickups overseas sales reached 160,177 units, an 80.7% increase year-on-year, setting a new historical record. Seagull, Song PLUS, Yuan Series and other models continued to sell well, with SHARK pickup truck volume exceeding 4,000 units for two consecutive months. With the product matrix continuously enriching and the global layout continuing to deepen, BYD's globalization process is advancing rapidly.

Benefiting from overseas market pull, BYD's total sales increased slightly by 0.26% year-on-year in May this year, ending the consecutive 8 months of year-on-year decline, and continued to win the champion of Chinese automotive enterprises' new energy vehicle sales with 383,453 units. Thus far, BYD has remained in the first place of domestic new energy vehicle monthly sales for a consecutive 60 months.

Relying on the "systematic ecological export" strategy from technology, production, channels to brand, BYD is becoming more and more brave in the overseas market. However, BYD's life situation at this time is like two sides of a coin. It advances boldly in the overseas market, but encounters cruel new tests in the domestic market. The current monthly sales in China are almost halved compared to the peak period. Structural adjustments are a mixture of joy and worry, and BYD is once again standing at a critical crossroads.

Can BYD Weld the Highlight Moment?

In the new energy track, BYD is the undisputed "Di King" in China and even globally. So far, its cumulative new energy vehicle sales have exceeded 16.5 million units. In recent years, while a group of international traditional car giants failed in the transition to electrification, leading enterprises such as "Di King" drove China's automotive industry to accelerate overtaking on a bend.

BYD's boss Wang Chuanfu has a forward-looking strategic vision, allowing this car company to catch the dividends of new energy and export two wind vane points. Relying on Blade Battery, DM-i Super Hybrid, e Platform and other full-stack self-developed systems, BYD has built cost moats that many car companies cannot cross through vertical integration of the industry chain, quickly grabbing the pure electric and hybrid market, gradually mastering strong pricing power in the 100,000-200,000 yuan main force model market, and further diluting R&D and production costs with scale effects, constantly pushing the cost advantage to the extreme.

While holding the "Price Slaughter Knife" to expand in the domestic car market, BYD also accelerated its extension of its entire industry chain layout, full-stack self-research, and cost advantages to the overseas market, precisely adapting to the needs of global diversified markets with a full price product matrix. In Southeast Asia/South America/Middle East markets, Yuan PLUS (ATTO3), Seagull focus on entry-level commuting, cost-performance ratio crushes Japanese fuel small cars, BYD's market share in Brazil's EV market exceeds 70%; in European and other markets, Seal, Song PLUS, Sea Lion 07EV constitute a core competitive matrix against Volkswagen ID series, Tesla Model 3/Model YCore Competitive Matrix. BYD's high-end models are gradually breaking the overseas market's stereotype that "Chinese cars rely on low prices", such as Denza focusing on European mid-to-high-end niche markets. Also, BYD commercial vehicle coordination, electric buses, forklifts go out simultaneously, such as Singapore electric bus market share exceeds 60%, passenger vehicles + commercial vehicles double pull local reputation.

Not only did products go out, BYD also accelerated localization of production globally, breaking tariff and delivery problems. Its four complete vehicle factories in Thailand, Brazil, Hungary, and Uzbekistan have started production, with Malaysia and Cambodia under construction. In addition, BYD's own RoRo fleet guarantees stable export capacity, solving industry sea transport bottlenecks, and signed top local automotive groups in each country as agents, gradually building thousands of brand direct + authorized stores in Europe, Southeast Asia, Middle East, and Latin America. With a set of combinations hitting, BYD's export has obviously accelerated.

After exports increased by about 1.4 times year-on-year in 2025 and broke the one million unit threshold for the first time, BYD's sales overseas continued to rise this year, largely buffering the pressure of BYD's sales decline in the domestic car market. However, for BYD to weld the highlight moment or even sprint to higher goals, it is inevitable to withstand the current cruel tests of domestic price wars backlash, narrowing technology advantages, and brand upward obstacles, breaking the dilemma of "defenders".

Can we find the key to value upward?

This year's domestic car market, how can it be described with a single word "hard". According to CPCA weekly report, national passenger car market retail in May was 1.545 million units, down 20% year-on-year, cumulative retail in the first 5 months of this year was 7.15 million units, down 19% year-on-year.

Due to weak consumption and car market shrinkage, car companies were forced to cut prices to grab market share, dozens of models collectively cut prices, exchanging price for volume diluted profits. At the same time, car companies also encountered unfavorable factors such as price increases in upstream lithium carbonate, non-ferrous metals and other raw materials. Price wars, high costs and weak demand are like three big mountains, further squeezing the profit space of the automotive industry. January to April 2026, automotive industry profit margin 3.4%, total profit 111.9 billion yuan, down 17% year-on-year, profitability pressure is still relatively large. In such a big environment, as the Leader BYD cannot be immune. In the first quarter this year, the company's net profit attributable to shareholders of the listed company was 4.085 billion yuan, down 55.38% from 9.155 billion yuan in the same period last year.

In the most competitive Chinese car market globally, in white-hot competition, BYD faces competitors like Geely Galaxy with nearly "pixel-level" benchmarking, plus the fierce attacks of new forces such as Leapmotor and Xiaomi, the difficulty to break the situation is not small. For example, Geely Galaxy's Xingyuan grabbed the Seagull's sales champion in the under 100,000 yuan niche market in 2025, in the 100,000 to 200,000 yuan core area, BYD even encountered more fierce encirclement and suppression by Leapmotor and other brands. Previously, BYD relied on Blade Battery and Super Hybrid to laugh off the Jianghu, but now Geely has Thor EM-i Super Electric Hybrid, SAIC has DMH, plus CATL's Qilin Battery, Shenhang Battery, Xiaoyao Battery and other technologies and products empowering many car companies, new energy sector hundreds of flowers blooming, BYD's technology is no longer unique. In addition, BYD also faces the challenge of user demand iteration. With new energy penetration rate exceeding 50%, the market moves from "trying new things" to "picky" stage, consumer car buying logic is also changing. BYD has room for improvement in smart cockpit, chassis tuning and other details, and its ride-hailing image is also difficult to support higher brand premium.

How to break the situation? BYD launches a combo, besides accelerating the promotion of globalization process, the more important measure is to focus on internal improvements, accelerate the iteration and upgrade of various technologies. In terms of intelligence, as of May 28, the number of BYD vehicles with assisted driving has exceeded 3.15 million units, Heavenly Eyes generates more than 200 million kilometers of data daily. On May 28, BYD announced the launch of urban pilot safety backup service, becoming the first car company in the world to realize both urban pilot and intelligent parking "double backup" at the same time. Three days after the conference, the daily active user volume of urban pilot for models equipped with Heavenly Eyes A, B assisted driving system increased by 50%. Previously, after the intelligent parking safety backup was launched, the function usage rate has increased from 21% to more than 90%. Wang Chuanfu said: "Dare to back it up, is true safety."

In the field of power technology, after the launch of the second-generation Blade Battery and Flash Charge technology, BYD is tightly rolling to continuously convert technological innovation into product competitiveness. Third-generation Yuan PLUS, Fang Cheng Bao Bao 5 Flash Charge version, Bao 8 Flash Charge version, Denza N9 Flash Charge version and other models have successively launched. At the same time, Dynasty Network Great Tang will be launched in mid-June, Denza N8L Flash Charge version, Seal 08, Sea Lion 08 will also be launched successively, further expanding BYD's Flash Charge product matrix.

In addition, BYD increased the intensity of high-endization, Denza, Fang Cheng Bao and Yangwang gradually have results, May Fang Cheng Bao, Denza combined sales 46,489 units. Among them, Fang Cheng Bao sales 30,186 units, up 139.7% year-on-year, creating a new high this year; Denza sales 16,303 units, continuing to maintain growth trend; Yangwang sales 286 units, up 105.8% year-on-year. The three high-end brands join forces, finally breaking the bottleneck of their proportion in BYD's total sales of less than one tenth.

Although the cruel fact is if export volume is excluded, BYD's sales in the domestic market in May are still far from the peak period, but its total sales year-on-year bottoming out slightly rising is still a positive signal. BYD is empowering products through new technologies such as second-generation Blade Battery and Flash Charge. With the "Great Tang" known as the most cruel "Value Assassin" in the full-scale market, holding 100,000 pre-sale orders, coming soon, and other new models successively launched, BYD is launching a new round of offensive value upward. It has come to a critical crossroads again, needing to use patience, wisdom and courage different from the past to deal with this profound change from "Scale Priority" to "Value Supreme", even not limited to the car making field. Recently, BYD announced making humanoid robots, perhaps starting to speed up the exploration and transformation towards technology companies outside the automotive congestion space, wanting to catch the new trend of AI.

Review

Currently, the domestic car market is declining, car prices are falling, and car company profits are declining. In such a big environment, car companies led by BYD face severe challenges while opening up a new round of continuous upward exploration of China's new energy vehicle industry. Going overseas is one of the breakthrough paths, but more importantly, how to find the key to value upward through technical innovation in this most competitive market in China.

(This article is original to "Heyan Yueche", without authorization, shall not be reproduced)