BYD 2025 H1 Performance Analysis
― After the Bankruptcy Rumor: A Look at Earnings and Risks
1. Where Did the Bankruptcy Rumor Start?
In late 2024, a rumor shook the EV market: “China’s leading EV manufacturer BYD is on the verge of bankruptcy.” This wasn’t just another conspiracy theory—it had real market impact. BYD’s stock temporarily declined, and some foreign investors became increasingly cautious.
However, when BYD released its performance for the first half of 2025, the narrative completely shifted. Beyond reporting strong sales, BYD also sent a clear signal of internal structural change in response to earlier criticisms. The earnings disproved the rumor, and the company’s strategy showed it was preparing for what comes next.
The bankruptcy rumor stemmed from three main concerns: First, declining EV demand in China. Second, BYD’s aggressive price competition. Third, concerns about unpaid supplier bills and a lack of financial transparency.
2. Performance Rebound: Higher Revenue and Sales
In Q1 2025, BYD posted a net profit of 9.2 billion yuan, which marked a more than 100% increase year-over-year. During the same period, the company sold around 1 million vehicles, over 410,000 of which were battery electric vehicles (BEVs).
In May alone, BYD sold more than 380,000 units, setting a new monthly record. Despite price cuts, its operating margin increased, suggesting improved production efficiency and a greater share of high-margin overseas sales. In short, BYD countered the rumors with data.
3. Overseas Sales: The Key Driver Behind the Rebound
The core of BYD’s 2025 growth story lies in its aggressive overseas strategy. Between January and May, BYD’s overseas sales surpassed 370,000 units, representing a 112% year-over-year increase.
Rather than focusing solely on exports, BYD is rapidly expanding its overseas manufacturing footprint. A plant in Thailand has begun operations, while a European manufacturing site is under construction in Hungary. BYD is also expanding assembly and distribution in Brazil and Indonesia.
This localization strategy is seen as a key to avoiding trade barriers, reducing logistics costs, and leveraging government incentives, positioning BYD with long-term competitive advantages.
4. BYD’s Weak Point: Unpaid Bills and Hidden Debt
Behind the impressive performance numbers lies a structural risk. BYD has been paying suppliers largely through commercial paper rather than cash. The maturity of these notes has reportedly been as long as 275 to 280 days.
As of the end of 2024, BYD had 1.65 trillion yuan in unpaid notes, and some analysts estimate that when short-term liabilities and supply chain financing are included, its total hidden liabilities could reach 4 trillion yuan.
Hong Kong-based GMT Research argued that while BYD reported net debt of 27.7 billion yuan, the company’s actual net debt may be 323 billion yuan when factoring in hidden obligations. That figure is 11 times higher than that of rival automaker Geely.
5. Government Regulation and BYD’s Structural Reform
This opaque payment structure raised supplier concerns and negatively impacted market trust. In response, the Chinese government introduced a regulation in June 2025 requiring companies to settle payments within 60 days of delivery.
BYD has since adjusted its practices, shortening payment timelines and reducing its reliance on commercial paper. The company announced plans to increase its cash settlement ratio in the second half of the year and is restructuring its internal supply chain payment system.
This is more than regulatory compliance—it's part of a long-term strategy to rebuild global trust and credibility.
6. Conclusion: The Rumor Is Gone, but the Real Battle Begins
BYD successfully put the bankruptcy rumor to rest with its first-half performance in 2025. It recorded strong growth in sales, profitability, and overseas expansion. In particular, its overseas localization strategy is likely to bring long-term benefits beyond short-term numbers.
Still, financial transparency, supplier relationships, and government compliance remain key challenges. The company has set a target of selling 5.5 million vehicles this year, with more than 800,000 expected to come from overseas markets. That means international market dynamics could significantly affect BYD’s full-year performance.
BYD has turned crisis into opportunity, but its next battleground will be more complex and global than ever before.
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