So it turns out BYD was a one-trick pony, and the government just shot the pony…

BYD, better known as Tesla's “Newman”, used to look untouchable. But now? The armor’s showing cracks as August sales barely budged… up a microscopic +0.1% from last year… all while the low grade dog food rivals BYD once laughed off are putting up record numbers.

(Source: Giphy) 

For instance, Geely is up +38%, Xpeng tripled last year’s haul, and Nio and Leapmotor are absolutely making deliver records their b*tch. Even crazier, Xiaomi, better known for budget smartphones, pushed more than 30,000 cars out the door in a single month. However, this is what happens when the Red Dragon gets high off discounting. BYD spent years buying volume with cut-rate pricing, a tactic that worked until Beijing stepped in and told the industry to quit acting like a liquidation sale. Without the crutch of fire-sale margins, BYD is exposed to competitors actually competing. 

(Source: Bloomberg) 

And yet, the numbers don’t lie. Domestically speaking, BYD sales dropped nearly 15% once you strip out exports and commercial vehicles. Sure, they still control 14.4% of the market, but that number hides a slowdown investors can smell from a mile away. Q2 profit fell 30%, vaporizing $6 billion in market cap overnight. At the exact moment rivals are gunning for growth, BYD is trying to explain why the king of China suddenly looks winded.

On the other hand, overseas expansion props up the story for now, but exports can’t save a business that’s getting carved up at home. Case in point: the wolves are hungry and Leapmotor (backed by Stellantis) isn’t here to make friends as it’s moving more than 57,000 cars a month and aiming at 650,000 for the year. Xpeng delivered nearly 38,000 in August, riding a wave of “smart EV” hype that puts BYD’s lineup to shame. Xiaomi has already sold 210,000 cars this year… in its rookie season. Translation: These aren’t ankle-biters anymore… they’re circling with the knives out.

(Source: Giphy) 

Of course, despite the negative setback, BYD swears it will sell 5.5 million cars this year. But to get there, it needs to move 2.6 million in the last four months of 2025. That’s almost the same volume it managed across the first eight months combined. Analysts don’t buy it, and I don’t either as the consensus pegs deliveries closer to 4.9 million (with the most bullish calling for 5.1). Either way, the crown slips big time. 

In the end though, BYD is still the biggest name in Chinese EVs. But in this market, size doesn’t matter, nor does it equal “safe”. The challengers are scoring records as regulators are clipping discounting, and investors just got a taste of what happens when profits crack. Peak season is here. If BYD can’t deliver, the throne it fought to build may end up split among the very rivals it once dismissed as sideshows. Meaning, keep your eyes on BYD going forward, and place your bets accordingly. Until next time, friends.

At the time of publishing, Stocks.News holds positions in Tesla as mentioned in the article.