What if I told you the world’s largest EV company might be facing serious trouble? 😱
Yes, BYD—the Chinese EV giant that overtook Tesla and captured global headlines—is suddenly showing cracks. Slowing sales, mounting debt, international pushback, and a government pulling back the support that once fueled its rise. So, what really happened, and what does it mean for your money? Let’s break it down.
BYD: From Unstoppable to Facing Headwinds
Just two years ago, BYD was unstoppable. Selling over 3 million cars in 2023, they officially surpassed Tesla. Chinese efficiency, unbeatable pricing, and massive government support made it look like BYD was building a future-proof empire.
But by 2025, things changed. Sales fell year-on-year for the first time since 2020, and net profits dropped 30% in just one quarter. How could a company growing 880% year-on-year in the UK suddenly see such a decline?
The answer: China. BYD depends heavily on its domestic market—90% of its sales come from China, and a shift in government policies is hitting hard.
The Global Expansion Struggle
BYD didn’t stop at China—they went global: factories in Thailand, Hungary, Brazil, and aggressive moves into Europe.
US Market: Closed off. Sky-high tariffs and upcoming bans make growth there impossible.
Europe: Facing up to 27% import tariffs, accused of dumping cars below cost thanks to subsidies. Their biggest advantage—low pricing—is fading, making BYD just another expensive foreign brand.
China’s Support: From Boost to Backfire
For the past decade, China pumped $230 billion USD into EVs: subsidies, tax breaks, free land, financial incentives—you name it. But now, as competition rises and EV “graveyards” become a reality, Beijing is cutting subsidies and tightening regulations. Without these incentives, BYD’s growth engine is faltering.
Debt & Cash Flow Worries
Rapid expansion came at a cost. BYD borrowed heavily for new factories and operations. Some suppliers reported 275 days for payment—almost 9 months! A new policy forced automakers to pay within 60 days, exposing BYD’s stretched cash flow.
Quick Ratio Snapshot: BYD sits at 0.42 vs Tesla at 1.36. Translation? Tesla has more than a dollar in cash for every dollar owed; BYD does not.
Some analysts are even calling BYD the “Next Evergrande of the EV Industry.” While there’s caution, it’s also a wake-up call for discipline over aggressive growth.
Buffett’s Exit
When Warren Buffett sold his $9 billion stake in BYD, the market noticed. BYD stock fell 7% in just three days. Buffett rarely sells unless he doubts a company’s growth story. Signal? Investors should pay attention.
Should BYD Owners Panic?
Not really. Your EV will still run fine. Battery, motor, and software updates remain intact. The only risk is after-sales service and slightly slower parts availability—but even that is manageable in countries like Malaysia. Resale value might take a hit, but most EV owners aren’t buying for resale.
The Bigger Picture for the EV Industry
BYD slowdown ≠ EV collapse. The industry is maturing.
Governments are cutting subsidies, tariffs are rising, and the EV boom is normalizing.
Only companies with real profit and disciplined growth will survive long-term.
Key Takeaway: Ambition drives growth, but discipline sustains it. Cash flow is king. Every boom faces its reckoning—and BYD is no exception.
💡 What do you think? Is BYD “too big to fail,” or is it a bubble waiting to burst?
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