BYD compounds Tesla's sales woes as revenue surges 14%

BYD delivered a 14% profit jump in the first half of 2025, while Tesla’s sales in Europe dropped for the seventh straight month, exposing a growing gap between the two EV giants.

The numbers came directly from BYD’s regulatory filing on Friday, confirming that net income hit 15.5 billion yuan ($2.2 billion) between January and June. Revenue jumped 23% to 371.3 billion yuan, backed by stronger EV demand and aggressive exports.

The company didn’t just rely on its home market. BYD shipped EVs from its Thailand unit to new territories like the UK, Germany, and Belgium, as confirmed by Xinhua.

The first half of the year saw 2.15 million cars sold, up 33% compared to 2024, but still short of the 5.5 million target it set for the full year.

That sales figure includes both fully electric models and plug-in hybrids. But while battery EVs kept growing in Q2, hybrid sales dropped, pulling down momentum inside China.

BYD sticks with discounts as Beijing warns automakers

BYD’s momentum came with a cost. In late May, the automaker slashed prices across models, triggering an industry-wide shake-up. Beijing didn’t like it. Officials warned that deep discounts were killing long-term brand strength and putting financial strain on companies.

Still, BYD kept the discounts through July. Some automakers made slight cuts. Others went even lower. The government’s effort to rein in the price war hasn’t changed much.

These discounts have now become a problem. Companies like BYD are left trying to grow sales without relying on the one tool they’ve leaned on for years. But the firm hasn’t backed down. In July, it outpaced all its EV rivals in Europe. It registered 13,503 vehicles, a 225% rise year-on-year, data from the European Automobile Manufacturers Association showed.

Tesla, on the other hand, posted just 8,837 registrations, a 40% plunge compared to July 2024. That’s despite an overall rise in EV demand across Europe. Elon Musk’s company has now recorded seven straight months of falling sales on the continent.

And it’s not just Europe where things are going south. Globally, Tesla’s auto sales revenue dropped in Q2, and Musk himself told shareholders that the company “could have a few rough quarters.”

Musk blames brand drag and model delays as sales sink

Tesla remains under pressure from intense local competition and political fallout tied to Musk’s public behavior, with his ties to President Donald Trump’s administration and controversial comments having alienated consumers in key European markets, giving competitors like BYD more room to grow.

Internally, Tesla also has nothing new to show buyers. It hasn’t refreshed its lineup in years. The company said it’s working on a lower-cost electric model and hopes to begin volume production in the second half of 2025, but that’s too far out to help current numbers.

Meanwhile, analysts watching BYD don’t seem too worried about its summer dip. Yuqian Ding, who leads EV research at HSBC, wrote that slower sales in July were caused by weak local demand and tighter control of dealership inventory. Ding said BYD’s stricter pricing policy was intentional and likely to “support more sustainable margin expansion ahead,” even if it means short-term volume pain.

In the domestic market, BYD still leads but faces trouble from within. The hybrid decline in Q2 has made its overseas expansion more urgent. With price controls back home and the discount tool now restricted, the company is using exports to meet its targets. The fact that it moved vehicles into Western Europe from Southeast Asia shows how far the firm is willing to go to stay ahead.

This year, BYD formally overtook Tesla in global EV production volume. But maintaining that lead will depend on how it handles the second half of 2025, when internal pressures meet external restrictions. On the other side, Tesla is bleeding market share even as the EV category grows without it.

Unless Musk can turn the story around by 2025’s end, BYD’s lead won’t just be temporary — it’ll be permanent.

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