BYD sales stumble as rival upstarts gain ground

SHENZHEN: The blows keep coming for BYD Co After a shock slump in profit that rattled investors, China's biggest electric-vehicle maker has seen monthly sales stall as smaller, nimble rivals chip away at its ascendancy.

BYD's total sales rose just 0.1% in August from a year earlier, showing its struggles to stay competitive.

Its biggest rival, Geely Automobile Holdings, saw a 38% increase the same month, while Zhejiang Leapmotor Technology Co. and Nio Inc. reported record deliveries.

Xpeng Inc.'s year-to-date shipments are already more than three times what it sold by this time last year.

The contrasting fortunes show the challenges of life at the top for BYD and point to an uncertain outlook for the rest of the year.

The carmaker's rise to dominate the world's biggest auto market has been underpinned by aggressive discounting that won over consumers, but has drawn the ire of officials in Beijing who want to stamp out the brutal price war that they see as a threat to the long-term health of the industry.

That leaves BYD entering the peak sales season in September and October without relying on discounts and trying to fend off rivals that are offering sleek, technology-focused models at similar price points.

BYD's push abroad has proved to be a bright spot for the carmaker, but it masks the challenges it faces from shifting market forces at home.

Stripping out overseas and commercial deliveries, domestic sales fell almost 15% last month, according to Bloomberg News calculations.

Still, the company remains by far the most popular EV brand in China. While its market share declined 0.2 percentage points in July, it holds a 14.4% share.

And year-to-date deliveries are 10 times higher than the likes of Xpeng and Li Auto.

But those smaller brands are mounting a fierce fight for consumers.

Stellantis NV-backed Leapmotor has eked out a 1.7% share of the Chinese market, with new model releases helping drive record sales of 57,066 units in August.

It's now handed over almost 329,000 vehicles this year, though it needs a strong finish to hit an annual target of 580,000 to 650,000 units.

Meanwhile, Xpeng is winning customers with cars laden with cutting-edge intelligent technology that are priced competitively with mass-market models from BYD and Geely.

It delivered a record 37,709 vehicles last month.

Similarly, newcomer Xiaomi Corp., better known for making smartphones, delivered more than 30,000 EVs in August. It's sold about 210,000 units this year.

All eyes are now on whether BYD can hit its ambitious goal of selling 5.5 million vehicles this year.

The carmaker stuck with the target despite reporting a 30% drop in second-quarter profit that wiped roughly US$6 billion (RM25.4bil) off its market capitalization Monday as shares slumped.

To hit the goal, BYD must deliver more than 2.6 million units in the final four months of 2025 - a tough task given it took eight months to sell just shy of 2.9 million.

With boutique brands gaining momentum, industry watchers warn BYD is likely to miss that target, it's just a question of by how much.

Annual deliveries may be just 4.9 million units, according to estimates compiled by Bloomberg. Sanford C. Bernstein is slightly more optimistic, expecting the company can hit 5.1 million.