BYD's Shift: Quarterly Revenue Drops for the First Time in Three Years, with Daily R&D Investment of 160 Million Yuan
After several consecutive quarters of rapid growth, BYD has made new rhythm changes.
In the latest disclosed third - quarter financial report, BYD's growth rate has entered a "buffer" period:
In the first three quarters, it sold 3.26 million vehicles, firmly ranking first in the country, and has completed over 70% of the annual target. The total revenue for the three quarters reached 566.27 billion yuan, a record high, with an average daily income of 2 billion yuan.
However, in the third quarter, both sales volume and revenue declined for the first time in three years. The net profit during the same period was 7.823 billion yuan, a year - on - year shrinkage of 30%.
The core reason lies in the R & D investment during the technology cycle.
Of course, with the year - on - year decline in growth, the market only looks at the surface, so the stock price dropped by 2.3%:
To truly understand BYD's overall fundamentals, one still needs to look beyond the surface data and dig deeper.
Selling more but earning less?
Judging from the overall sales volume, BYD's upward trend remains strong.
In the first nine months of this year, BYD's cumulative sales volume of new energy vehicles reached 3.26 million, a year - on - year increase of 18.64%, still ranking first in the domestic market.
However, the sales volume in the third quarter was 1.114 million, a year - on - year decline of 1.85%, the first single - quarter decline in three years.
BYD officially and "cautiously" announced its sales target for this year for the first time - 4.6 million. As of the end of September, 70.87% of the target has been completed, and there is still a KPI of 1.34 million vehicles to achieve.
If it wants to meet the target, it needs to deliver an average of 446,600 vehicles per month in the next three months. Judging from the delivery volume in the fourth quarter of last year, it is not an unattainable goal.
Looking at the delivery structure of passenger cars, the cumulative sales volume of pure - electric models in the first three quarters reached 1.606 million, a year - on - year increase of 37.3%, accounting for 49.3% of the total sales volume. The pure - electric delivery volume has exceeded that of Tesla for four consecutive quarters.
In terms of revenue indicators, its growth curve is basically in sync with the sales volume.
In the first three quarters of this year, BYD's total revenue was 566.27 billion yuan, a year - on - year increase of 13%, a record high for the same period. On average, it can receive about 2 billion yuan in revenue per day.
Among them, the revenue in the third quarter was 194.985 billion yuan, a year - on - year decrease of 3.05%, also the first decline in three years, and a 2.9% decline from the previous quarter.
In terms of profit, the company's net profit attributable to shareholders in the first nine months was 23.33 billion yuan, a year - on - year decline of 7.55%.
The net profit attributable to shareholders in the third quarter was 7.823 billion yuan, declining for two consecutive quarters and a 32.6% decrease compared with the same period last year, which is actually in line with the trend of profit decline of most automobile enterprises in the first half of the year.
However, even with the decline, BYD remains one of the most profitable automobile enterprises in China. Roughly estimated, it can earn a net profit of about 85.46 million yuan per day on average.
Finally, looking at the cash and assets, the net cash flow from operating activities of the company was 40.845 billion yuan. As of the end of September this year, BYD's balance of cash and cash equivalents was still 1.1175 trillion yuan.
As of the end of the third quarter, the company's total assets were 901.925 billion yuan, and the total liabilities were 643.527 billion yuan. The asset - liability ratio was about 71.35%. Compared with the data of automobile enterprises in the first half of the year, it is at a relatively low - middle level.
The amount of accounts payable and notes payable was 225.015 billion yuan, a year - on - year decrease of 6.4%. Considering the sufficient cash flow, it may have actively optimized its payment schedule.
Overall, BYD's performance in the first three quarters was still strong, but it entered a growth "buffer" in Q3 - selling more but earning less.
Entering the buffer zone, how should BYD accelerate?
Why is this the case? In fact, BYD earns a lot but also spends a lot. Especially in terms of R & D investment, it has spared no expense.
In the third quarter, BYD's R & D expenses were 14.152 billion yuan, a year - on - year increase of 3.31%.
In comparison, SAIC, which had the third - highest R & D investment among automobile enterprises in 2024 (the second was Xiaomi Group), had an annual R & D expense of 17.65 billion yuan. NIO and Li Auto, ranked fourth and fifth respectively, had R & D expenses of 13.04 billion yuan and 11.07 billion yuan last year.
BYD's cumulative R & D expenses in the three quarters of this year reached 43.75 billion yuan, a year - on - year increase of 31%, with an average daily expenditure of 160 million yuan, far exceeding other automobile enterprises and ranking first.
Moreover, in the past 11 quarters, in 10 quarters, BYD's R & D expenses exceeded its net profit.
BYD's generous investment in R & D has led to a continuous stream of technological breakthroughs this year:
In terms of electrification, there is the Super e - platform that integrates megawatt - level flash charging, a high - performance 30,000 - rpm motor, and a full - domain kilovolt high - voltage architecture. There is also the fifth - generation DM technology, which reduces the fuel consumption under power - deficit conditions to 2.4 - 2.6L/100km.
In terms of intelligentization, since advocating "equal access to intelligent driving", BYD has successively launched the "Tian Shen Zhi Yan" assisted driving system, the DiLink intelligent connected system, and the Xuanji architecture that integrates intelligent and electric technologies. By September, BYD had increased the penetration rate of assisted driving to 91.3%.
In the short term, the new technologies and products resulting from high R & D investment may squeeze the profit margin. In the long run, however, they are the foundation for the company to maintain pricing power. The returns of this investment on profitability can also be seen in the financial report:
In the third quarter, BYD's comprehensive gross profit margin was 17.6%, a 1.3 - percentage - point increase from the previous quarter, indicating that the profit pressure is easing.
It must be admitted that BYD's growth rate has indeed declined, and it won't be easy in the short term.
Therefore, it can be perceived that after a brief slowdown in the third quarter, BYD launched a fierce offensive in the fourth quarter. In October alone, at least seven models were intensively launched.
For example, on October 23, it launched three DM - i models, the 2026 BYD Song L, Song Pro, and Qin L, all at once. Just before the release of the financial report, it launched the new Denza brand model Denza N8L.
In addition, on the basis of its existing business, BYD has found two paths with more room for development, high - end positioning and the overseas market, both of which have shown results in this quarter's financial report:
The three high - end brands, Fang Cheng Bao, Denza, and Yangwang, had a combined sales volume of 223,000 in the first three quarters of this year, a year - on - year increase of 83.5%, and their proportion in the total sales volume increased to 6.8%.
In terms of overseas expansion, in the first three quarters of this year, BYD's overseas sales volume reached 697,100, a year - on - year surge of 136%, contributing 21.38% to BYD's total sales volume.
One More Thing
BYD, which has been highly successful overseas, also participated in the Tokyo Motor Show, becoming the only "Chinese face" officially exhibiting.
After all, BYD is now one of the top four automobile enterprises in global sales. Compared with Japanese automobile enterprises, it has surpassed Honda, Suzuki, and Nissan, only second to Toyota (data source: Yiche Ranking).
Along with BYD, there is also the K - EV BYD RACCO, which is specially tailored for the Japanese market. Translated, it means "otter".
It has an appearance in the style of a boxy small car favored in the Japanese market, with a double - sided sliding door design. It is expected to be equipped with a 20kWh battery pack, with a WLTC cruising range of 180km and support for a 100kW charging power.
In addition, BYD also introduced the Sea Lion 06 DM - i, which is the company's first plug - in hybrid model launched in Japan.
After 20 years in Japan, it seems that BYD is determined to open the Japanese market wide this time. As netizens put it, it will "give the Japanese market a little shock".
As for whether it can achieve its goal... Just look at the scene of the press conference. BYD's exhibition booth was crowded with people.
