Byd Company Limited adopted a new strategic approach in 2025. Over the preceding four years, the company had seen its profits surge from 3 billion to 40.3 billion yuan, achieving high growth for four consecutive years. Its gross margin climbed from 12% to 19%, and it consistently maintained more cash on hand than interest-bearing debt.

In 2025, this previous identity was cast aside. Revenue growth slowed to its lowest rate in five years, and profits declined for the first time in the new energy vehicle era. However, Byd Company Limited made its largest-ever strategic bet during this period—capital expenditures nearly doubled compared to 2023, and total borrowing also doubled.

This shift was not a passive reaction. From an industry perspective, during a year of intensifying domestic competition, Byd Company Limited's expansion pace reached a peak. It can be argued that the company placed its biggest wager at a most challenging time. With its domestic market leadership under pressure and profitable overseas markets just beginning to open up, Byd Company Limited had no choice but to push forward against the trend. Facing battles on two fronts, the company is going all-in.

Byd Company Limited encountered its most severe competitive situation domestically since the dawn of the new energy era. While its fourth-quarter 2025 revenue exceeded expectations, this was primarily driven by growth in its electronics business; revenue from vehicle sales remained largely flat. Concurrently, unit sales volume decreased year-over-year, indicating a lower average selling price per vehicle. By the second half of the year, the average domestic selling price had fallen to 127,000 yuan, and the gross margin dropped to 17.2%—a significant decrease from 23.9% two years prior.

This was not necessarily due to Byd Company Limited weakening, but rather its competitors strengthening. In 2024, Byd Company Limited's DM 5.0 plug-in hybrid technology faced almost no rivals. By 2025, competing technologies like Geely's Thor Hybrid 2.0 and Chery's C-DM 6.0 had been launched, narrowing the gap in fuel consumption under battery-depletion mode to within 0.1 liters per 100 kilometers. The technology lead shrank from a full generation ahead to a mere half-step advantage.

Within Byd Company Limited's core 100,000 to 200,000 yuan price segment, competitors engaged in intense, close-quarters competition. Geely's Galaxy series, employing a strategy of "high configuration + strong value," nearly doubled its sales. Its market share in new energy vehicles recovered to 16.3% by February 2026, closing in on Byd Company Limited. Other players like Leapmotor, Changan, and Great Wall Motors also made aggressive moves in their respective segments. Although Byd Company Limited managed to maintain its plug-in hybrid market share at around 36% by introducing long-range versions, its market dominance was clearly diminished compared to before.

The situation in the pure electric vehicle segment was even more challenging. In March 2025, Byd Company Limited launched its advanced e-Platform, boasting a capability of adding 400 kilometers of range with a 5-minute charge—impressive technical specifications. However, initially this technology was only available on higher-end models like the Han L and Tang L, priced above 200,000 yuan, leaving the high-volume market below 150,000 yuan without the benefit. Consequently, its pure electric vehicle market share remained under pressure.

Furthermore, "anti-involution" policies limited Byd Company Limited's traditional tactic of using price cuts to recapture market share. As the industry leader, its pricing strategies faced stricter scrutiny.

Byd Company Limited was not idle in its response. It doubled the pure electric range of the Qin Plus from 55 km to 128 km. Its Fang Cheng Bao brand, initially focused on premium off-road vehicles, expanded downward with the launch of the Titan 3 and Titan 7 models. The Titan 7, in particular, was an immediate success, surpassing 100,000 cumulative units by January 2026. However, the essence of these moves was "adding features without raising prices," using higher configuration costs to defend its existing market position.

An additional factor weighed on the fourth quarter. New purchase tax regulations taking effect in 2026 would raise the minimum pure electric range requirement for plug-in hybrids from 43 km to 100 km. This forced Byd Company Limited to clear inventory of older models facing obsolescence through "significant end-of-line discounts and purchase tax subsidies." Simultaneously, ensuring models like the Qin and Song series met the new standards pushed up Bill of Materials costs.

The result was a Q4 sales volume surge to 1.34 million units, a quarter-on-quarter increase of 20.5%, but the gross margin fell to just over 16%. While the market had believed in Q3 that Byd Company Limited had "emerged from its operational trough," the Q4 financials indicated that economies of scale did not boost profits; instead, they were consumed by the price war and mandatory cost increases for new features.

Additionally, the sales contribution from Byd Company Limited's premium brands in Q4 jumped from 6% to 11%, almost entirely due to the Fang Cheng Bao Titan 7, which starts at 179,800 yuan. Excluding the Titan 7 and Titan 3, the contribution from core premium models priced above 300,000 yuan remained around 5%. A strong brand premium has yet to be firmly established. Defending its domestic turf is proving difficult for Byd Company Limited.

Under domestic pressure, Byd Company Limited did not choose to retrench. On the contrary, it increased its bets simultaneously in two strategic directions.

Domestically, it's a battle of defense, using technology to buy time. The second-generation Blade Battery and megawatt-level fast-charging technology announced on March 5th are key, with a focus on making them accessible. The 6C-level fast-charging will be systematically rolled out to core models in the 150,000-200,000 yuan range. The company plans to build 20,000 fast-charging stations by the end of 2026, complemented by one year of free fast-charging benefits. This represents an infrastructure investment aimed at addressing a weakness in its pure EV offerings, directly countering the moves of Geely and XPeng in the mainstream 800V charging market.

Investment in autonomous driving is also accelerating. Total annual R&D expenditure reached 63.4 billion yuan, with capitalized R&D spending surging from 966 million yuan to 5.463 billion yuan. The Tian Shen Zhi Yan (God's Eye) advanced driver-assistance system has been installed in over 2.56 million vehicles, and the first L3-capable models received approval for road testing in December 2025. However, the challenge remains that autonomous driving has not yet become a must-have feature for the mass market. Sales of "ADAS-enabled" new models, hampered by delayed feature rollouts and rising BOM costs, have not effectively translated into significant volume increases.

According to industry insights, Byd Company Limited is scheduled to hold an autonomous driving launch event in April 2026. Expectations are for announcements covering lidar solutions across multiple price segments and new algorithms. This event will be a critical test: whether its self-developed urban Navigate on Autopilot technology can be deployed on models priced around 100,000 yuan will determine if it can stem the bleeding in its domestic core business.

Based on supply chain research, the upcoming DM 6.0 hybrid system is expected to achieve a record-low fuel consumption under battery-depletion mode, potentially reaching 1.8L/100km. However, its launch is anticipated in the second half of the year, representing a solution that cannot address immediate pressures.

Fast-charging, autonomous driving, and DM 6.0 are three strategic cards being played sequentially, but all involve a time lag. The defensive battle in the domestic market has not yet reached the harvest phase.

The overseas market is the true source of confidence allowing Byd Company Limited to expand aggressively despite domestic pressures. Automotive revenue from overseas markets skyrocketed from 99.7 billion yuan to 191.3 billion yuan, nearly doubling. Exports surpassed 1.05 million units. However, the profit structure behind these numbers is the critical point.

In the second half of the year, the average selling price overseas was 186,000 yuan per vehicle, compared to 127,000 yuan domestically—a difference of nearly 60,000 yuan. The overseas gross margin was 28.1%, versus 17.2% domestically—a gap of nearly 11 percentage points. The gross profit per vehicle overseas was 52,000 yuan, 2.4 times the domestic figure of 22,000 yuan. After deducting various expenses, the net profit per vehicle overseas remained stable above 20,000 yuan.

The overseas market is steadily becoming the core profit driver for Byd Company Limited moving forward. If the 2026 export target of 1.5 to 1.6 million vehicles is achieved, and assuming a net profit of 20,000 yuan per vehicle overseas, international operations could contribute 30 to 32 billion yuan in net profit—accounting for nearly two-thirds of total automotive profits. Byd Company Limited is transforming into a company that relies on overseas markets for profitability.

Consequently, a significant portion of the 140.2 billion yuan in capital expenditures is allocated overseas. The Hungary plant is expected to commence production in Q2 2026 with a planned annual capacity of 150,000 units. The Brazil plant is planned for expansion to 300,000 units. Factories in Thailand have started production, and one in Cambodia has broken ground. Eight pure car and truck carrier vessels have been deployed. Overseas non-current assets doubled from 15.3 billion yuan to 31.8 billion yuan. The plan for European retail stores has been doubled from 1,000 to 2,000. By the end of 2026, localized overseas production capacity is projected to exceed 510,000 units.

Byd Company Limited is attempting to rapidly establish a global manufacturing and supply chain system. Localized production implies changes to the cost structure—local labor, compliance costs, and depreciation during the production ramp-up phase will all increase per-unit costs. It remains to be seen at what level the 28.1% overseas gross margin can stabilize.

Domestically, it relies on technology investment to buy time. Overseas, it relies on capacity investment to lock in profits. Both strategic lines require significant cash burn, but one is primarily defensive, while the other is offensive.

The outcome of pursuing both strategies simultaneously is reflected in Byd Company Limited's current financial report. Full-year net profit attributable to shareholders was 32.6 billion yuan, a decrease of 19% year-on-year. The gross margin fell from 19.44% to 17.74%. Operating cash flow halved from 133.5 billion yuan to 59.1 billion yuan, while capital expenditures surged from 92.5 billion yuan to 140.2 billion yuan. Total borrowing doubled to 113.4 billion yuan. Throughout the year, the company utilized four financing tools simultaneously: it secured 134 billion yuan in new bank loans, issued 20 billion yuan in corporate bonds, saw a net increase of approximately 3.9 billion yuan in perpetual bonds, and raised about 40 billion yuan through a Hong Kong secondary share offering.

In 2024, every 1 yuan of capital expenditure generated 8.4 yuan in revenue; this ratio dropped to 5.7 yuan in 2025. Investment efficiency is declining while investment intensity is rising.

However, Byd Company Limited's bet is not on 2025, but on the period from 2026 onwards. The potential for significant domestic growth in 2026 appears limited. Factors such as the impact of the halved purchase tax policy and new energy vehicle subsidies tilting towards mid-to-high-priced models above 167,000 yuan—a segment less favorable to Byd Company Limited's core 100,000-150,000 yuan price band—pose challenges.

With the domestic market focused on defense, Byd Company Limited's 2026 profits will most likely have to be carried by its overseas operations. In January-February 2026, overseas sales already accounted for 51% of the total, exceeding domestic sales for the first time.

On the domestic front, key validation milestones are packed closely together. The autonomous driving technology launch, the DM 6.0 release, and the transition of the fast-charging network from planning to the deployment of 20,000 stations all require time and capital. The financial impact of these three strategic initiatives will not be visible in earnings reports until the third quarter at the earliest.

For the overseas business, the core question is singular: can the speed of the production ramp-up outpace the narrowing of gross margins? As the Hungary plant starts production in Q2, the Brazil plant expands, and localized manufacturing advances, the 28.1% gross margin will inevitably decline. If it can stabilize above 22%, overseas sales of 1.5 million vehicles would be sufficient to support profits at the 30-billion-yuan level, providing a buffer against domestic pressures.

As these critical milestones are reached throughout the year, the specific numbers reflected in subsequent financial reports will determine whether the market interprets 2025 as a "capacity building year" or the "inflection point for profitability."

In 2023, Byd Company Limited enjoyed rising volumes and prices, explosive profit growth, and smooth sailing. The 2025 version of Byd Company Limited is fighting on multiple fronts, having placed the most significant strategic bet in its history. This is the answer presented by Chairman Wang Chuanfu. Whether it is the right answer will be revealed in 2026.