BYD is facing a business challenge that isn't too bad.

Although the sales volume in the domestic market has declined, the overseas market has been advancing by leaps and bounds. BYD is facing a business challenge that is not too bad.

1

On July 1st, BYD announced its sales volume for June 2025. The data shows that BYD sold 377,628 passenger cars in that month, a year-on-year increase of about 11% compared to 314,668 units in June last year. Among them, overseas sales reached 89,699 units, a year-on-year increase of 229.8% compared to 26,990 units in June last year. The domestic market sales volume was 287,929 units, a year-on-year decline of nearly 8.5% compared to 314,668 units last year.

BYD's sales performance in June is also a microcosm of its current business situation. That is, the overseas market is in a smooth state, while the domestic market is beginning to face huge competitive pressure. Wang Chuanfu, the founder of BYD, once said at the 2024 annual general meeting of shareholders, "The company's overseas sales data this year will be very good, and the prices in the overseas market are relatively stable, which will greatly help the company's profitability."

There are many doubts from the outside world about BYD's current pressure on domestic sales. However, the author believes that there is no need to be too sensitive about this. This is because BYD had a large first-mover advantage in the new energy vehicle market in the past few years, so it reaped the greatest market dividends. But as other automobile manufacturers have made up for their capabilities and successfully transformed, it is reasonable for these competitors to achieve a phased sales rebound.

Taking Geely Automobile, BYD's current biggest competitor, as an example, before BYD became the leader in the Chinese automobile industry, Geely Automobile had been the sales champion of Chinese independent automobile enterprises for a long time and has a profound corporate heritage. Due to its slightly later layout in the new energy vehicle field than BYD in previous years, it lost its leading position in the industry. But after BYD's rise, Geely Automobile quickly responded by launching the Geely Galaxy brand focusing on new energy vehicles and comprehensively imitating BYD's popular models, seizing a lot of market share from BYD.

In addition to established automobile enterprises like Geely with strong strength, new car-making forces represented by Huawei Hongmeng, Li Auto, Xiaomi, NIO, XPeng, and Leapmotor have also gradually found their footing, and their sales volumes have been continuously increasing. Especially XPeng and Leapmotor. After a series of business trial and error, these two new force brands have gradually positioned their price ranges in the same-level market as BYD's main brand. Similar to the strategy of Geely Galaxy, they comprehensively imitate BYD's popular models, which also brings considerable pressure to BYD.

Taking June as an example, the sales volume of Geely Galaxy was 90,222 units, that of Leapmotor was 48,006 units, and that of XPeng was 34,611 units. The total sales volume of the three reached 172,839 units, which has exceeded 50% of BYD's overall brand sales volume. This means that BYD's absolute leading advantage in the domestic market is disappearing.

However, what makes BYD feel a little more relaxed is that the high-growth dividends of the above-mentioned core competitors under the low base are gradually disappearing. For example, Geely Galaxy's sales volume of 90,222 units in June decreased by nearly 10% compared to 101,845 units in May. XPeng's sales volume of 34,611 units in June only increased slightly compared to 33,526 units in May and even decreased compared to 35,045 units in April. Only Leapmotor has maintained a month-on-month growth rate in the past six months, continuously setting new sales records. However, from April to June in the second quarter, its monthly sales volume has been between 40,000 and 50,000 units for three consecutive months, and the growth momentum has also slowed down.

In the second half of the year, the growth pressure on Geely Galaxy, XPeng, and Leapmotor is no less than that on BYD. While they continue to put pressure on BYD, BYD's counterattack will also bring continuous and huge pressure to them.

2

In addition to the negative performance of pressure on domestic sales, BYD has shown relatively impressive performance in the two dimensions of globalization and high-end development.

Among them, its outstanding achievements in globalization have exceeded public expectations. Taking the first six months of this year as an example, BYD's overseas sales volumes were 66,300 units, 67,000 units, 72,700 units, 79,000 units, 88,600 units, and 89,700 units respectively, showing a rapid advancement. It is particularly worth mentioning that in many developed countries and regions overseas, BYD's sales volume has already exceeded that of Tesla.

Currently, the situation of low-price competition in the domestic new energy vehicle market is unsustainable, and it is inevitable that new automobile enterprises will be eliminated in the future. Cost advantage and the company's cash flow ability are the key factors determining success or failure. On the one hand, BYD has a huge cost advantage. On the other hand, it has overseas profits to support the domestic market. It is very likely that BYD will gradually drag down those new car-making forces that have been involved in the price war before achieving profitability.

In the high-end field, BYD has also made certain progress in the second quarter of this year. Among them, although the performance of the two flagship models, the Z9 and N9, newly launched by Denza in 2025 is far lower than public expectations, they have still helped the Denza brand achieve sales of over 15,000+ units for three consecutive months from April to June, reaching a new level. Not long ago, the Denza brand officially announced another large SUV model, the N8L, which is slightly smaller in size than the N9. Its price is bound to be more competitive than that of the N9, and it is expected to drive the Denza brand to break through the monthly sales volume of 20,000+ units.

What is most surprising is the Fangchengbao brand. On the one hand, the two flagship models, the Leopard 5 and Leopard 8, have shown stable performance, with sales volumes of around 5,000 units and 2,000 units respectively. This is an extremely excellent performance in the mid - to high - end hardcore off - road SUV market. On the other hand, the newly launched urban pure - electric SUV model, the Titanium 3, has become a phenomenal hit. Its single - month sales volume in June reached 12,017 units. With the help of the Titanium 3, the Fangchengbao brand's sales volume in June also increased significantly to 18,903 units, surpassing the Denza brand. Moreover, the sales volume of the Titanium 3 is still growing, and it is expected to continuously set new records in the next few months.

As the Fangchengbao brand's layout in the urban SUV field has achieved remarkable results, it will conduct a more in - depth layout in this field in the future. Currently, the Titanium 7, which focuses on mid - to large - sized urban SUVs, has been officially announced and will be launched soon. According to the currently revealed information such as appearance, configuration, and price expectations, the Titanium 7 is also expected to become a popular model with monthly sales of over 10,000+ units. By then, Fangchengbao's sales volume is expected to exceed 30,000+ units, which can already place it in the first - tier position among the current new car - making forces.

Due to the influence of historical factors, BYD's brand image in the minds of users is a bit traditional, which affects its performance when competing with new car - making forces for young users. However, the Fangchengbao brand, which was initially positioned as a personalized brand, is naturally endowed with strong genes of youth, fashion, and technology, well making up for the shortcomings of BYD's main brand and better matching the needs and preferences of young consumers. It is expected to become a surprise force to help BYD quickly regain the market share lost to new car - making forces.

Yangwang, as an ultra - high - end luxury brand under BYD, had good momentum at the initial stage of its launch but then gradually declined. Among them, the large SUV model U8, which received the most attention, has gradually become mediocre, with a sales volume of only 64 units in June. The sales volume of the super - car model in June was even fewer, only 9 units. The performance of the newly launched large flagship sedan model U7 was also lower than expected, with a sales volume of only 132 units in the first full - delivery month. The cumulative sales volume in the entire June was only 206 units, making a negligible contribution to BYD's overall sales volume. The recently announced U8L, although it has won a certain amount of attention, is destined to have an unoptimistic sales volume due to its higher positioning and price compared to the U8.

However, Wang Chuanfu, the founder of BYD, still remains confident in BYD's high - end development. He said, "The company has realized and found some problems and will spend a lot of time and energy on them. High - end development is a battle that BYD must win."

3

Overall, BYD has indeed begun to face certain growth challenges at present, but the situation is not too bad. It is just a stage of adjustment that inevitably occurs after the company's high - growth period.

The author suggests that BYD should not be overly anxious at this time and should not be restricted by sales KPIs. Instead, it should focus on "sales quality". After all, the competition among enterprises ultimately boils down to the competition of "products". BYD should learn the principle of "less is more", humbly learn from the successful logic of popular models in the industry such as the Li L6, AITO M9/M8, and Xiaomi SU7, and focus on creating a few mid - to high - end popular products that can bring about industry - disruptive changes. On the other hand, BYD should pay attention to optimizing the brand's perception in the minds of consumers, enabling consumers to truly understand the differences in BYD's technology and products and eliminating the information asymmetry between users and the brand.

In all industries, as the competition progresses, the remaining enterprises are all extremely powerful. It is difficult to distinguish the winner among these enterprises in the short term. Ultimately, it will be a competition of who has more strategic determination and business resilience and who can adhere to "making no mistakes". At present, compared with BYD's defensive pressure, other automobile enterprises are under greater pressure to survive and are more likely to make mistakes. At this time, BYD only needs to stay calm, control the business rhythm well, and avoid making fatal mistakes. It is very likely that it will ultimately "be the last one standing".

This article is from the WeChat official account “Lishi Business Review” (ID: libusiness). Author: Lishi. Republished by 36Kr with permission.