Not even Chinese cars, which in the first phase of the lightning expansion that today leads them to invade Western markets were pushed by public money as if it were raining and fully experienced the intoxication of a market, the domestic one, with annual growth rates in triple digits, are immune to the fierce price war that broke out in China and has already been exported here to Europe as well. This is once again demonstrated (in fact it has been closely watched for some time and the fact that Warren Buffet chose to divest after 15 years a few months ago has lit a glaring warning light on the dashboard) by the accounts of Byd, an Asian brand that so far had made news for managing to produce and register more electric cars than Tesla. That mad rush, however, came at a cost and exhausted the financial statements.
BYD’S NUMBERS NO LONGER SMILE
The net profit of the Shenzhen giant in the last three months of the year stood at 9.3 billion yuan (about 1.3 billion dollars), marking a 38% collapse compared to the same period in 2025. Therefore, analysts’ estimates were completely missed, who, although reduced, bet that Byd could reach at least 10.5 billion.
THE DARWINISM OF AUTOMOTIVE MAKES NO DISCOUNTS
At the same time, revenues suffered a 14% decline, falling to 237.7 billion yuan. In short, the results of the price war that broke out as mentioned in the domestic market are now clearly evident, where over 130 brands (also born thanks to massive public funding) compete for a market that insiders say can contain at most a dozen.
The dark words of Stella Li, executive vice president of Byd, echo grimly, spoken on the sidelines of the Munich Motor Show when she declared that in China it will be inevitable that “some manufacturers will be excluded.” “Even 20 carmakers are too many,” the Asian top manager later told the Financial Times, implying that, like other major countries, China will also remain with a limited number of “big” players in the sector.
But above all, these quarterly numbers are the first evidence of the constant and increasingly marked erosion of operating margins that has stressed the accounts in the hope of maintaining high production volumes. The problem for the Shenzhen company (and not only, given the high number of compatriot rivals in the same situation), however, is that the local market is now saturated: Byd has seen its share in China collapse from 27% to 17%, a slowdown in sales that has brought the direct competitor, Geely Automobile, to first place.
BYD HAS NOT LEARNED THE LESSON
To avoid further stalling, Byd is accelerating international expansion: export revenues have grown by 40% and the Chinese company has set a goal of selling 1.3 million vehicles outside China in 2026. Mainly in Europe and South America, since the US has effectively closed itself off to hi-tech cars from Beijing and surroundings, citing national security reasons since the previous Biden administration (the argument is that their driver assistance sensors would collect data sent back home whose purposes are unknown).
But Byd, if you look at its most recent moves, seems to replicate in the West the same aggressive scheme that in China has derailed its accounts. The industry publication Quattroruote writes: “In Germany, the Shenzhen company now sells the Atto 2 Boost at 22,990 euros, instead of 38,990, for a total cut of 16,000 euros: of these, 11,500 euros are the 29% cut applied by the manufacturer compared to the list price, plus 4,500 euros of state incentives, for an overall drop of 41%.”
THE RISK FOR EUROPEAN BRANDS
No Western manufacturer today could implement pricing policies as competitive. And the reason they are reserved for Germany is quickly explained: in the country “one fifth of car sales in Europe are recorded. From there, the Dragon’s companies then aim to branch out into the rest of the Old Continent.”
A blow to the engine of German carmakers who from Volkswagen to Mercedes to Porsche are going through a particularly difficult period. But also a strategy that in the long run does not pay off, as demonstrated by Byd’s current accounts. And here too, soon the Chinese giant will have to face its Asian “sisters” (starting again with Geely) who are pushing into Europe driven by the same, ancient and incessant hunger for new users. But above all, in such a ruthless war, what will become of the native brands?
