BYD announced its financial results for the third quarter of 2026, registering a 28% year-on-year increase in net profit to reach 10.02 billion Chinese yuan, supported by the export of more than half a million vehicles outside the country within just three months.
The financial report submitted to the Hong Kong Stock Exchange detailed the financial performance during the period from July to September, with revenue reaching 221.49 billion yuan, an increase of 13.6% year-on-year, marking the company's best quarterly profit since the end of 2024 and the first year-on-year revenue growth after four consecutive quarters of decline.
Despite the quarterly growth, the cumulative performance for the first nine months of the year showed conservative stability; revenue reached 566.30 billion yuan with a slight increase of 0.01%, while net profit declined by 4.2% to 22.34 billion yuan, affected by foreign exchange losses and higher provisions for asset impairment.
The Role of Exports and the Impact of the Domestic Market
Overseas markets played the largest role in supporting the company's growth during the third quarter; BYD sold a total of 1,323,065 vehicles, an increase of 18.7% year-on-year. The entirety of this growth came from exports, which reached 550,704 vehicles, recording a massive jump of 137% compared to the same period of the previous year, making exports account for about 42% of the company's total sales.
In contrast, the domestic Chinese market witnessed a decline of about 12% to reach around 772,000 units, amidst the continuation of the competitive price war and its pressures on profit margins despite the launch of new economic models such as the Seagull car.
Balance Sheet Challenges and Cash Liquidity
The company's balance sheet witnessed notable changes since the beginning of the year; automotive inventory rose by 60% to reach 221.58 billion yuan. The company attributed this increase to the expansion of operations and orders in overseas markets, where cars take longer in shipping lines, delivery, and ports.
Cash reserves and available securities also decreased by 45% to reach 71.72 billion yuan, bills payable to suppliers doubled, while research and development expenses dropped by 17% to reach 36.28 billion yuan during the nine months.
What Does This Transformation Represent in Practice?
BYD's financial performance reflects a radical shift in its business model toward rapid global expansion, which imposes massive capital requirements and a longer supply chain cycle. While the export strategy succeeds in compensating for the domestic market slowdown and raising quarterly profits, inventory inflation and declining liquidity impose new challenges regarding the sustainability of these margins if overseas markets face price fluctuations or a slowdown in demand.