Subsidy Cuts and Fierce Competition Lead to Sharp Q1 Profit Drop for China’s BYD and Geely

Geely's First-Quarter Net Profit Drops 27%
BYD Net Profit Down 55.4%, Short-Term Borrowings Up 72%

As competition in the Chinese electric vehicle (EV) market intensifies and government subsidies are reduced, the first-quarter earnings of major Chinese EV manufacturers have deteriorated.

According to Bloomberg News on April 29, Geely Auto reported that its net profit for the first quarter of this year fell by 27% year-on-year to 4.2 billion yuan (approximately 907 billion KRW).

Jiri Starley EM-i Vehicle. Photo by Reuters and Yonhap News

This figure is significantly below the analyst consensus compiled by Bloomberg, which stood at 4.5 billion yuan.

First-quarter revenue increased by 15% year-on-year to 83.8 billion yuan.

BYD, the world's largest electric vehicle manufacturer, also saw a sharp decline in its results, as announced the previous day. BYD reported a first-quarter net profit of 4.08 billion yuan, down 55.4% compared to the same period last year. This marks the lowest level in more than three years, a steeper drop than in the fourth quarter of last year (-38.2%), and the sharpest decline since 2020.

First-quarter revenue fell by 11.8% year-on-year to 150.2 billion yuan. As of the end of March, short-term borrowings stood at 66.3 billion yuan, a surge of 72% in just three months.

In terms of vehicle sales during the first quarter, Geely Auto slightly outpaced BYD, selling 709,358 units compared to BYD's 700,463 units. However, looking at March sales alone, BYD led the market.

As competition in the Chinese automotive market intensifies, the financial results of major companies are worsening. Bloomberg analyzed that, due to oversupply, leading manufacturers are engaging in relentless price cuts. According to the China Automotive Technology and Research Center, the annual production capacity of Chinese automobile factories reaches 55.5 million units, while domestic sales in 2025 amounted to only about 23 million units. Bloomberg pointed out that this means the average utilization rate of Chinese automobile plants is around 50%, a figure that is unsustainable in the long term.

In response, Chinese automakers are expanding exports and overseas production. BYD has raised its overseas sales target for this year to more than 1.5 million units, up over 40% from last year. Overseas sales in the first quarter increased by more than 50%, with exports accounting for 45% of total deliveries. Geely Auto also raised its overseas sales target from 640,000 to 750,000 units.

This content was produced with the assistance of AI translation services.