The Chinese EV giant’s Hong Kong-listed shares rose on the first day of trading for the new year, gaining as much as 2.3%.
The Shenzhen-based carmaker delivered 4.6 million vehicles last year, up 7.7% from 2024. That’s in line with a lowered full-year goal the company gave in September. Among the mix, it sold almost as many fully-electric vehicles as it did plug-in hybrids.
Tesla on Friday is expected to report that it delivered around 440,900 vehicles in the fourth quarter, down 11% from a year earlier, according to data compiled by Bloomberg. That would see annual sales comes in at around 1.6 million – the second consecutive annual drop.
BYD and its rivals face growing pressure in the coming year as China scales back some incentives supporting EV purchases. An influx of new models is also making domestic competition even fiercer, while trade barriers pose challenges for BYD’s ambitions to expand overseas.
China’s best-selling carmaker has faced stiffer competition in the past year from Geely Automobile Holdings Ltd and Xiaomi Corp, whose new models and rapid innovations are winning over consumers.
BYD’s shares gained 7% last year, but gave up gains from an early rally that saw its shares jump as much as 74% by late May as tougher competition and increased regulatory scrutiny became more prominent.
BYD’s CEO Wang Chuanfu said at an investor meeting in early December that the technological headstart the company had maintained over the past few years had diminished and affected domestic sales.
He hinted at new technology breakthroughs to come, with the company’s 120,000-strong engineering team giving him confidence about its ability to regain advantages, Chinese media reported.
A bright spot for BYD has been surging overseas sales. Deliveries outside China hit 1.05 million in 2025, exceeding the high-end estimate of 1 million sales, enabling it to offset the company’s decline in its core market. Its passenger EV and hybrid sales fell for the eighth consecutive month, slumping 37.7% in December.
Morgan Stanley said in a note it forecasts a more meaningful domestic recovery after BYD launches several major facelifts in early 2026 to its line-up.
The company has set a goal to expand overseas sales to between 1.5 million to 1.6 million units in 2026, according to a Citigroup Inc. report in November that cited a meeting with BYD management.
Pressure is mounting on BYD after it posted back-to-back declines in quarterly profit and found itself at the centre of China’s efforts to rein in aggressive discounting. The growing scrutiny is likely to accelerate consolidation and shake up the hierarchy of the sector.
So far, analysts are confident that BYD can weather the challenges better than others. The company’s total sales could grow to 5.3 million units next year, according to analyst estimates compiled by Bloomberg.
Analysts at Deutsche Bank expect new product launches and the unveiling of a technology platform to boost the company’s competitiveness.
That could enable BYD to stretch its lead over Tesla, which is struggling with challenges of its own.
The US carmaker saw sales plunge in the early part of 2025 as it retooled production lines at each of its assembly plants for the redesigned Model Y.
CEO Elon Musk’s polarising role in the Trump administration also put off some consumers, and the US ending federal purchase subsidies for EVs is expected to drag on demand going forward.