BYD’s Overseas Revenue Tops Domestic for the First Time, Yet Domestic Revenue Falls by More Than RMB 72 Billion

On the evening of Aug. 28, BYD delivered its 2026 interim report. Operating revenue came in at RMB 344.815 billion, down 7.13% year on year; net profit attributable to parent-company shareholders was RMB 12.325 billion, down 20.54% year on year. Taken at those two lines alone, it looks like a routine report card from a lost price war. But a regional revenue breakdown table buried in the report records something far rarer.

In the first half, BYD's overseas revenue reached RMB 181.268 billion, up 33.92% year on year, accounting for 52.57% of total revenue; domestic revenue was RMB 163.547 billion, down 30.68% year on year, or 47.43% of the total. Calculated on the basis of the announcement, overseas revenue exceeded the same period a year earlier by roughly RMB 45.9 billion, while domestic revenue fell short by about RMB 72.4 billion — the first time overseas revenue has surpassed domestic in absolute terms.

Even more thought-provoking is another line in the same table: an overseas gross margin of 21.71% versus a domestic gross margin of 15.67%.

Half Overseas Offensive, Half Domestic Retreat

"Overseas revenue tops domestic for the first time" can easily be read as unalloyed good news. Set the growth rates of the two regions side by side, though, and the conclusion becomes far more complicated.

In the first half of 2025, BYD's overseas revenue was RMB 135.358 billion, or about 36.5% of total revenue for that period. A year later the share has climbed to 52.57%, with the 33.92% growth of overseas business itself contributing part of the rise and the 30.68% decline at home contributing the other half. In other words, this half-and-half revenue split comes partly from overseas markets genuinely scaling up volume, and partly from the domestic base contracting.

Sales figures send a consistent signal. In the first half, BYD sold a cumulative 1.8085 million new energy vehicles, down 15.72% year on year; exports accounted for 792,000 units, up 67.8% year on year (the company cited data from the China Association of Automobile Manufacturers in its interim report), or nearly 44% of total volume. Total sales shrank by roughly 340,000 units year on year while exports grew by about 320,000 units; between the gain and the loss, domestic sales were some 660,000 units lower than a year earlier.

Wang Chuanfu attributed the domestic pressure to the supply side: sales falling short of expectations is mainly related to insufficient capacity of the second-generation Blade Battery, which is still ramping up. "This year's sales depend on battery output," he said. That remark was relayed by media without the occasion being specified. If it holds, then part of the drop in domestic revenue reflects the company's own capacity-allocation choice — steering batteries preferentially toward overseas orders that carry higher gross margin per unit. This is exactly what makes the earnings report worth discussing: the revenue structure is not being reshaped by the market, but reallocated by the company.

Profit Down 20%, but Gross Margin Rising

Revenue and profit declining at the same time while gross margin moves upward is the second anomaly. Interim results show first-half overall gross margin of 18.85%, above the 18.01% recorded a year earlier; total gross profit was RMB 64.989 billion, down 2.81% year on year, a far smaller decline than revenue. By business line, automotive and related products generated RMB 275.341 billion, or 79.85% of revenue, at a gross margin of 22.33%, up 1.98 percentage points year on year; electronics and other products generated RMB 69.405 billion, or 20.13% of revenue, at a gross margin of 5.04%, down 2.67 percentage points year on year.

The profit gap appeared on the expense side. First-half financial expenses were RMB 5.096 billion, versus negative RMB 3.247 billion in the same period last year — swing of roughly RMB 8.3 billion more in spending year on year, which the company said in the report was mainly due to exchange losses caused by currency fluctuations. Over the same period, the decline in net profit attributable to parent shareholders was about RMB 3.2 billion. The fall in book profit was clearly smaller than the disruption caused by foreign exchange.

Several supporting metrics point the same way: net profit attributable to parent shareholders after deducting non-recurring items was RMB 12.373 billion, down 9.02% year on year, a far shallower decline than the headline figure; net operating cash flow was RMB 37.335 billion, up 17.28% year on year; cash reserves at period-end stood at about RMB 167.4 billion. Read together, the conclusion is that selling cars has not itself become less profitable — what is weighing on the statements are exchange rates and domestic scale.

Some institutions therefore offered more optimistic arithmetic. Sinolink Securities calculated that, excluding the impact of exchange gains and losses, second-quarter net profit after non-recurring items rose 52% year on year; BofA Securities estimated second-quarter net profit per vehicle of about RMB 7,200, up roughly 47% year on year; Yicai, citing Hua'an Securities, reported that excluding BYD Electronic and calculated on an after-non-recurring-items basis, second-quarter profit per vehicle was about RMB 7,200, up 46.5% year on year. These are broker estimates rather than company disclosures, each on a different basis, and can only serve as reference points.

A 6-Point Scissors Gap Explains Many Choices

Overseas gross margin of 21.71% versus 15.67% at home, a gap of 6.04 percentage points — and the two moving in opposite directions: overseas up 1.90 percentage points year on year, domestic down 1.30 points. This scissors gap says more about what is happening at BYD than the "over half" revenue share does.

Why is overseas more profitable? First, the pricing system: the Denza Z9GT starts at about 115,000 euros in Europe, markedly above the price of the same model at home. Second, competitive intensity: the domestic price war suppresses not only list prices but also rebates and discounts, and the 1.30-percentage-point drop in domestic gross margin within a year is the quantified result of that pressure. Third, product mix: in the first half, the three premium brands Fang Cheng Bao, Denza and Yangwang posted combined sales growth of 61% year on year, accounting for 12.8% of the group's passenger-vehicle volume, and such high-priced models are easier to sell at a premium overseas.

The cost is equally explicit. The higher the overseas share, the larger the currency exposure, and the roughly RMB 8.3 billion increase in expenses this period is a by-product of that structure. Overseas volumes also depend on roll-on/roll-off shipping capacity, local market access and compliance environments, making them more volatile than domestic orders. On Sept. 2, BYD published a statement saying it would take the Guidelines on Overseas Competition Conduct and Compliance Development in the Automotive Industry as its reference, standardize its overseas pricing-management system and strictly hold the line on fair competition. That the company proactively wrote price management into a public statement suggests the order-maintenance costs of overseas markets have begun to surface.

In the Race Overseas, Ranking and Scale Do Not Coincide

Placing BYD back among peers' interim reports gives a fuller set of coordinates. In the first half, Chery exported 939,000 units, up 71% year on year, with overseas revenue of RMB 98.968 billion, up 51.0% year on year; Great Wall Motor's overseas sales of 289,000 units had already exceeded its domestic sales of 286,700 units, with overseas revenue accounting for about 55% of the total; Geely exported 474,000 units, up 158% year on year. By export volume, BYD is not first; but by absolute overseas revenue, RMB 181.268 billion still stands clearly above other Chinese automakers, and its overseas gross margin exceeds its domestic gross margin.

That means BYD's globalization is no longer just about "selling more" — it is beginning to possess the ability to set prices outside its home market. Management expects full-year overseas sales could surpass the original target of 1.5 million units. In August alone, BYD sold 188,700 passenger cars and pickups overseas, up 134.6% year on year, a record high. As for the frequently cited "second growth curve," the company did not break out energy-storage revenue separately in the interim report; media, citing disclosures on an investor-relations platform, put 2025 energy-storage shipments at more than 60GWh — supplementary information outside the reporting period.

Four Numbers to Watch in the Second Half

First, whether the decline in domestic revenue can narrow. If domestic sales remain constrained by the battery capacity ramp-up, the overseas share will rise by default, but that is not a healthy structural improvement.

Second, whether overseas gross margin can hold above 21%. Signs of overseas price competition have already emerged, and once overseas gross margin slips, commanding more than half of revenue would instead become a drag.

Third, the direction of exchange gains and losses. The roughly RMB 8.3 billion increase in expenses shows that the deeper the globalization, the more sensitive the statements are to currencies.

Fourth, actual progress on localized overseas capacity. Plants in Brazil, Thailand and elsewhere are already in production; when facilities under construction and planned bases form effective capacity will determine how long overseas revenue can sustain such high growth.

Period-end cash reserves of RMB 167.4 billion, operating cash flow of RMB 37.335 billion and R&D spending of RMB 28.861 billion (down 6.54% year on year) form a base that gives BYD room to absorb a temporary contraction in domestic scale. But the precise meaning of "overseas revenue tops domestic for the first time" is not that globalization has already succeeded — it is that this company's source of profit, pricing system and risk exposure have all changed position at once.

Reference Data Sources

BYD Company Limited · 2026 Interim Report · 2026-08-29 · http://static.cninfo.com.cn/finalpage/2026-08-29/1225531835.PDF

National Business Daily · Comparative review of earnings: a look at the interim reports of seven major automakers — five clear RMB 100 billion in revenue, and BYD is the only one to post RMB 10 billion in net profit attributable to parent · 2026-09-01 · https://www.nbd.com.cn/articles/2026-09-01/4569379.html

Yicai · Overseas revenue tops domestic for the first time: BYD's valuation logic is being rewritten · 2026-09-03 · https://www.yicai.com/news/103346360.html