TLDR
- BYD reduced its 2025 vehicle sales target from 5.5 million to 4.6 million units
- Hong Kong shares dropped 3.2% after the target cut news broke
- Company reported 30% quarterly profit decline, first drop in three years
- Intense competition from Geely and other rivals pressuring market share
- New target represents slowest growth since 2020 for the EV maker
BYD Company has slashed its 2025 vehicle sales target to 4.6 million units, marking a 16% reduction from its original goal of 5.5 million vehicles. The Chinese electric vehicle manufacturer communicated the revised target internally to staff and suppliers last month.
The news sent BYD’s Hong Kong-traded shares tumbling 3.2% on Thursday. American depositary receipts under ticker BYDDY also declined 1.35% in US trading sessions.
This target reduction follows a challenging quarter for the Tesla rival. BYD reported a 30% drop in quarterly profit last week, representing its first decline in over three years. Through August, the company has only achieved 52% of its original annual sales goal.
Competition Intensifies in Chinese EV Market
BYD faces growing pressure from established competitors and new market entrants. Geely Automobile has emerged as a formidable challenger, with its economy car sales surging 90% year-over-year in July while BYD’s sales in the same segment declined 9.6%.
Geely recently increased its own 2025 sales target to 3 million vehicles. Other rivals including XPeng and smartphone maker Xiaomi are launching competitive models that threaten BYD’s market position.
The competitive landscape has shifted as Beijing implemented restrictions on heavy vehicle discounting. This regulatory change eliminated one of BYD’s primary strategies for defending market share during China’s ongoing price war.
BYD’s production data reveals the strain. Manufacturing output fell for consecutive months in July and August, marking the first back-to-back decline since 2020. Vehicle deliveries during these months remained flat compared to 2024 levels.
Analyst Outlook Remains Mixed
Bernstein analyst Eunice Lee described the lower sales target as a “near-term clearing event” for BYD stock. She noted the revised goal aligns more closely with current investor expectations and may prove more achievable.
Wall Street maintains cautious optimism despite the challenges. Analysts have assigned a Moderate Buy consensus rating based on five Buy recommendations and one Hold rating. The average price target of $17.56 suggests potential upside of 26.51%.
Deutsche Bank forecasts BYD will deliver 4.7 million vehicles in 2025, while Morningstar projects 4.8 million units. Both estimates align closely with BYD’s internal target.
The revised 4.6 million vehicle target still represents 7% growth compared to last year. However, this would mark BYD’s slowest annual expansion since 2020, when sales declined 7% during the pandemic.
BYD remains China’s largest electric vehicle manufacturer despite recent headwinds. The company transformed from an EV startup to a global automotive force through vertical integration and cost control strategies.
The upcoming months will test BYD’s resilience as September and October represent peak selling season in China’s automotive market.
