BYD Ready to See a Sales Explosion

After publishing my monthly report on BYD sales last week, some commenters left superb comments putting the continued sales drop into perspective, and also hinting at a sales explosion in coming months — a potential sales explosion.

Before getting into those, just note that BYD’s sales were down in April compared to April 2025, and every month of this year so far has been down year over year.

Mr T responded: “Lots of competition with some excellent vehicles from the other Chinese manufacturers. Add in the fact that many people may be waiting for flash charging to come to the model they want to buy, and the decline makes sense. After all, would you buy the current Atto 3 or wait for the new flash charging model in a month or two?”

Another commenter, Perihelion, noted: “isn’t it because they are retooling their factories? Swapping older architecture to the one supporting flash charging.” That is certainly one big potential factor. When you know a much better technology is coming soon, why buy the old model? Just wait a month or two and get the Flash Charging! Right?

But there is that other matter of market competition. A Hatice Giz responded: “Partly but it is mostly demand side. China cut the subsidy this year. So last year hd a pull forward effect and this year the aftershock. Similar to US market last summer. Secondly Geely is agressively pricing and eating everyones market share at the bottom. Thirdly Huawei and Xiaomi are doing great at the top. Finally i think BYD needs a car below Seagull perhaps with Na batteries really cheap for sale into low tier cities and rural areas.”

Of course, our own Larry Evans had an excellent, long comment:

“BYD is in the middle of the largest product transition in their history since the last generation Blade Battery was launched. One of the first mainstream models to ramp up (Song Ultra) sold 61,240 in its first month. And supply is still the limitation. I was able to drive that car at a dealer and understand why it is selling so well.

“However, other than having demo models of that car on hand, the dealer supply was gutted. They had a few older DM-i models, like the Song Pro and Qin Plus. Models that BYD didn’t even bother to bring to the Beijing Auto Show. But they were still waiting on new models. And they were waiting on their flash charging pile to be installed, while the foundation was already poured. That was anticipated in the next week. The inventory situation could also change quickly, but production ramp up takes time.

“People are not buying many of the handful of older models that they are trying to clear out. They want the new models that are rolling out across their lineup. Updated models with better tech, longer range and recharging times as fast gasoline can refill. They are also waiting on better new generation models (e.g., Yuan Plus) and new models (e,g., Seal 08).

“BYD does not have a demand issue for its new cars, it just does not have enough of its new cars available yet. Wait until the flash charging models ramp up.”

A few other commenters made the same basic point much more briefly. “At this point, buyers know the Blade 2 is coming soon across much of the BYD lineup. So some may be postponing purchase based on that. Not the only factor at play but could be part of it,” Madcalf wrote. “Maybe an Osborne Effect with waiting for blade 2.0 battery?” Guanabara postulated.

There were several other similar and related comments. But let me wrap up with another note on the matter of incentives. “Isn’t this the first year that China no longer has large EV incentives? Just like Trump killing the $7,500 EV incentives here in the US?” Larry Park asked. Larry Evans again provided more details and perspective on this: “China used to have a full 10% purchase tax exemption on their EVs, which reduced to a 5% exemption. On vehicle prices up to a max of 300,000 RMB (~$42k). Like going from being exempt from the full sales tax in the US to being exempt to half of the sales tax. For the average EV in China, it is roughly a $1100 difference. On a car like a Seagull, around $500. It is something, but not a decisive difference. Despite the hype, subsidies were never the primary driving factor in China.

“The largest factor regarding sales so far this year has been major product updates. In general, 1Q is seasonally depressed in China, so automakers tend to schedule product updates for the this time period. The brands with major product updates saw sales depressed more than those with more limited updates. As sales of new models ramp up, the new models have performed better than the models they replace.”

I agree with Larry that a ~$1,000 subsidy change is not the biggest factor in this story, and it’s hard to say anything comes close to the effect of the new product launches, production still ramping up, and consumers waiting for the new models.

So, assuming the Osborne effect is the main factor, combined with limited supply so far, one would assume a surge in BYD sales in coming months. And then there’s a whole other factor kicking in that a handful of commenters mentioned — the US & Israel war on Iran has completely disrupted the oil industry, and that has resulted in oil and petrol/gas prices jacking up. Without a doubt, those rising prices and simply news of the war have inspired more people to buy electric cars around the world, including in China. Yes, China’s got its massively built up oil reserves and has been working to insulate its people from the biggest effects of the war in Iran, but everyone can see that there’s incredible disruption in the Middle East, and the oil world broadly. That tells consumers one thing: hey, maybe it would be more sensible to go electric.

Everything taken together, I expect we will see a huge surge in BYD’s sales in coming months. Whether that’s enough to make up for the slow start to the year, we’ll see.