However, this is an expensive and high-risk goal for the electric vehicle brand, which is investing large sums of money in building factories abroad to evade tariffs and other trade barriers. What software caused problems in BYD cars?
In addition to increasing competition, some of BYD's problems are a consequence of its own decisions. Some Chinese customers have expressed complaints on social media about the God's Eye system, the sophisticated, highly publicized system designed to detect dangers on the road and allow the car to drive practically on its own. With great anticipation, BYD announced last year that God's Eye would not only be incorporated into its premium vehicles but would also become a standard feature across its entire range, even in the most economical compact cars. This initiative sought to consolidate BYD's dominance in the world's largest automotive market, offering advanced technology for which its rivals charge a high price, but at no additional cost.
However, the problems the company has faced with God's Eye have highlighted the limitations of some of BYD's technologies and illustrate a potential drawback of adding advanced systems to cars before all their problems have been solved.
“The global landscape has evolved at a rapid pace; the century-old transformation of the global automotive industry has entered a critical phase.”
According to data compiled by Bloomberg, this is the third consecutive quarter in which BYD's profits have fallen short of estimates. 2026 has not been much better: Sales plummeted in the first two months of this year, and after dominating the Chinese market for years, BYD has ceded the top spot to Geely. This has prompted BYD to seek more and more opportunities abroad, where demand for its models is on the rise and the manufacturer generates higher profits per vehicle sold. Exports have remained stable so far in 2026, in contrast to the drop in domestic sales, and BYD aims to sell 1.3 million cars outside of China this year.
BYD's profits fell more than expected due to relentless competition and greater regulation in China, increasing pressure on the world's largest electric vehicle maker to revive its stalled growth. BYD's profits fell 38 percent in the fourth quarter to $1.3 billion, while revenue decreased approximately 14 percent to 237.7 billion yuan, according to figures released this Friday, March 27. Both profits and sales fell below the average analyst estimates compiled by Bloomberg. These figures capped a forgettable year for President Wang Chuanfu: BYD recorded its first annual profit decline in four years and its slowest revenue growth in six, due to aggressive discounts that boosted deliveries enough for BYD to overtake Tesla in sales, but which had a negative impact.
Why did BYD's revenue fall in the last quarter?
BYD's rise to global dominance is facing the harsh reality of dealing with slowing sales in its home country, forcing the industry leader to invest heavily to keep up with the technological models launched by newcomers like Xiaomi. “Competition has reached its peak and is going through a brutal decisive phase,” Wang wrote in his annual letter to shareholders.
