BYD Company Limited reported a larger-than-expected drop in profit, as fierce competition in China and tightening regulations have increased pressure on the world's largest electric vehicle manufacturer to reignite its growth momentum.

Calculations based on annual figures released on March 27 show that BYD's net profit for the fourth quarter fell by 38% to 9.3 billion yuan, while revenue decreased by approximately 14% to 237.7 billion yuan. Both profit and revenue fell short of the average analyst estimates compiled by Bloomberg.

These results concluded a challenging year for Chairman Wang Chuanfu, as BYD recorded its first annual profit decline in four years and its slowest revenue growth in six years. Aggressive discounting helped BYD surpass Tesla in deliveries, but it came at a cost. The automotive giant faces a reality check in its pursuit of global dominance, with slowing domestic sales forcing it to increase investments to compete with high-tech models launched by new entrants such as Xiaomi Group.

According to Bloomberg-compiled data, this marks the third consecutive quarter in which BYD's profit has fallen below expectations.

For the full year 2025, BYD's net profit declined by 19% to 32.6 billion yuan, while revenue saw a modest increase of 3.5% to 804 billion yuan. The closely watched gross profit margin dropped to 17.7%, the lowest level in three years, down from 19.4% in 2024.

Following the announcement that 2025 net profit and revenue missed analyst expectations, BYD's American depositary receipts fell by 1.8% on Friday.