BYD reported a 41 percent year-on-year decline in February vehicle sales, as weaker domestic demand and regulatory changes weighed on China’s largest new energy vehicle (NEV) maker. The company sold 190,190 units during the month, marking its sixth consecutive monthly decline.

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Policy changes and financing response Exports remain strong

The February total included 187,782 passenger vehicles and 2,408 commercial vehicles. Of the passenger vehicles, plug-in hybrids accounted for 108,243 units, while battery-electric models reached 79,539 units. Sales of plug-in hybrids fell 44 percent year-on-year, and battery-electric vehicles declined 36 percent over the same period.

Seasonal factors contributed to the slowdown. The Chinese New Year holiday, which ran from February 15 to 23 this year, reduced working days and temporarily halted automotive production and retail activity. In 2025, the holiday fell primarily in January, making this year’s February comparison more pronounced.

Combined sales for January and February totaled 400,241 units, down 36 percent compared with the same two-month period last year, indicating that seasonal effects do not fully explain the decline.

Policy changes and financing response

China’s full purchase tax exemption for new energy vehicles expired at the end of 2025 and was replaced in January 2026 with a 5 percent levy. The policy shift triggered a surge in demand late last year, leaving softer demand at the start of 2026.

Industry data show that 1.38 million NEVs were sold nationwide during the final months of 2025, with BYD accounting for 420,398 units. Analysts note that the strong year-end push created a gap in early 2026 sales.

Also Read: BYD, Tesla and Xiaomi roll out 7-year loans as China auto sales slow in early 2026

In response, BYD has introduced seven-year low-interest loan programs as part of a broader financing push. Other automakers, including Tesla and Dongfeng-Nissan, have also rolled out extended zero-interest plans to support sales.

Exports remain strong

While domestic sales declined, BYD’s overseas shipments continued to grow. Exports reached approximately 100,000 units in February, up 50 percent year-on-year and marking the fourth consecutive month of six-figure export volumes.

Full-year exports in 2025 totaled 1.1 million vehicles, exceeding earlier projections of around 800,000 units. The company has set an export target of between 1.3 million and 1.6 million vehicles for the current year.

With high tariffs limiting access to the U.S. market, BYD is focusing on Latin America and Europe for expansion. The company is pursuing local manufacturing initiatives and vertical integration strategies to strengthen its presence and manage trade-related risks.