For years, BYD's Shenzhen headquarters has been a spectacle, showcasing the company's explosive safety demonstrations of conventional EV batteries. However, the world's largest maker of electric vehicles is facing a new reality: its vertical integration model is showing signs of weakness.
Revenue has increased ten-fold in the past decade to $116bn last year, but net profit fell for the first time in four years in 2025. In April sales fell, year on year, for the eighth month running. BYD's run of more than three years as China's leading EV-seller was ended by Geely in 2025, though BYD has since reclaimed top spot.
The company's strategy of keeping things in-house is credited with its success, but it may be a hindrance in an industry that is increasingly focused on software and entertainment. Young customers often inspect the large entertainment display panels on the dashboard before anything else, and several rising challengers, such as Xpeng and Li Auto, were founded by internet bosses rather than industrial tycoons.
BYD is keeping its focus on batteries, but even that may not be enough to maintain an edge. Competitors such as CATL, the world's biggest battery-maker, are reproducing many of its achievements, and it is getting ever harder to maintain an edge from batteries alone.
