On March 2, 2026, investment researcher AJ (@alojoh) posted on X that BYD’s factory utilization had fallen below 50%, with like-for-like sales down 36% after stripping out Lunar New Year distortions — calling it “the most rapid sales collapse I’ve ever seen outside a severe economic recession.”
Tesla CEO Elon Musk swiftly reposted with his own take: “That’s tough sledding.” He elaborated on factory economics: above 80% utilization is great, 60% is marginal, and below 50% is “mega pain” — fixed costs get spread across fewer vehicles, crushing per-unit margins.
Six-Year Low: Sales Plunge 41% in a Single Month
BYD sold 190,190 new energy vehicles in February 2026, down 41.09% year-over-year and 9.46% month-over-month from January’s 210,051 units — marking the sixth consecutive month of year-over-year decline.
This is the steepest single-month contraction since February 2020 during the early COVID outbreak. By segment, pure EV passenger car sales fell 36.3% to 79,539 units, while plug-in hybrid sales dropped an even sharper 44% to 108,243 units.
Multiple Headwinds: Policy Withdrawal and Intensifying Competition
The Lunar New Year calendar shift played a role in distorting the figures: the 2026 holiday fell February 15–23, while in 2025 it was concentrated in January, creating a significant working-day mismatch. Even so, combined January–February sales still fell roughly 36% on a comparable basis.
The reinstatement of a 5% purchase tax on new energy vehicles at end-2025, along with the expiry of government subsidies, further dampened consumer demand. Meanwhile, rivals including NIO, Zeekr, XPeng, and Xiaomi all posted strong year-over-year growth, eating into BYD’s domestic market share.
Exports Surge: Overseas Sales Overtake Domestic for the First Time
BYD exported 100,600 vehicles in February, up 50% year-over-year, with overseas shipments exceeding domestic sales for the first time ever. European registrations reportedly tripled compared to the same period last year.
BYD currently operates nine vehicle manufacturing bases in China with a combined annual capacity of 5.82 million units. Overseas, plants in Thailand and Uzbekistan are operational, the Brazil facility began assembly in July 2025, and the Hungary factory started trial production in January 2026. Jefferies analysts forecast BYD’s annual export volume could reach 1.5 million units this year.
BYD’s Response: Long-Term Loans and a Technology Push
To counter softening domestic demand, BYD launched ultra-low-interest auto loan plans with terms up to seven years, lowering the barrier to purchase while sidestepping regulatory pressure on direct price cuts.
On the technology front, BYD has announced a second-generation megawatt-level ultra-fast charging system, along with Blade Battery 2.0 and next-gen flash-charging technology. Analysts view these launches as critical to any sales recovery. March data will be the next key test of whether BYD can reverse the trend.
