BYD Sales Drop for Third Month as Tax Credit Deadline Fails to Spark Buying Frenzy

The world’s largest EV maker just posted its worst sales streak in years, and it happened during what should have been the industry’s biggest buying rush.

BYD Co. delivered 480,186 vehicles in November 2025, a 5.3% decline from the same month last year, according to Bloomberg. This marks the third consecutive month of year-over-year declines for the Chinese automaker, and the timing could not be worse.

We’ve been tracking the pressure building on Chinese EV makers for months, and November’s numbers confirm what we warned about: the easy growth is over.

Why This Matters Now

The decline is particularly troubling because it comes during the traditional year-end buying surge. Chinese consumers typically rush to showrooms in the final quarter to lock in purchases ahead of the December 31 expiration of the country’s full new-energy vehicle tax exemption.

Starting January 1, 2026, China’s NEV purchase tax exemption gets cut in half. Currently, qualifying EV buyers enjoy a tax waiver worth up to 30,000 yuan ($4,200). That drops to a maximum 15,000 yuan ($2,100) deduction next year.

The clock is ticking, yet BYD’s sales are falling.

The Plug-in Hybrid Collapse

Look at the numbers and you’ll see the real crisis hidden inside. BYD’s battery electric vehicle sales actually surged 19.9% year-over-year to 237,540 units. BEVs now account for exactly half of all passenger vehicle sales.

The problem is plug-in hybrids.

PHEV sales plummeted 22.4% to 237,381 units, marking the eighth consecutive month of year-over-year decline in this segment. The trend accelerated rapidly. In April, the PHEV decline was just 0.4%. By June, it hit 12.5%. Now it’s above 22%.

This isn’t a blip. Chinese consumers are shifting toward fully electric vehicles, and BYD’s once-dominant hybrid lineup is losing relevance fast.

Competition Is Eating BYD’s Lunch

Bloomberg’s report points to intensifying competition from rivals churning out popular models, and two names keep appearing.

Geely Automobile Holdings has revitalized its lineup and is stealing market share in both mass-market and premium segments. The company raised its 2025 delivery target by 11% to 3 million vehicles after a 59% sales surge in June.

Xiaomi Corp. is the bigger shock. The smartphone company’s YU7 SUV secured 240,000 non-refundable orders in just 18 hours after its June launch. In October, the YU7 outsold Tesla’s Model Y in domestic deliveries. A smartphone company is now beating both Tesla and threatening BYD’s SUV sales.

“We anticipate peers to follow BYD’s price cut,” CLSA analysts noted earlier this year when BYD slashed prices by up to 34%. They did, and now everyone’s margins are bleeding.

The December Pressure

BYD now needs to sell approximately 418,000 units in December to meet its reportedly adjusted full-year target of 4.6 million vehicles. That’s a massive final push for a company watching monthly sales decline.

The company quietly lowered its annual target from 5.5 million to 4.6 million in September. Even the reduced goal looks ambitious now.

Here’s where BYD stands:

Exports: The Bright Spot That Can’t Save Them

BYD exported 131,935 NEVs in November, a staggering 326% increase from the same month last year. Overseas sales continue to be a rare bright spot, with the company on track to meet its 900,000 to 1 million export target for 2025.

But here’s the problem: trade barriers are closing the escape route.

Rising tariffs in Europe and regulatory hurdles in North America are limiting BYD’s ability to pivot volume away from the saturated Chinese market. The company is building factories in Hungary, Turkey, and potentially Spain specifically to neutralize EU tariffs, but that’s a multi-year solution to an immediate problem.

With four out of five BYD vehicles still sold in China, the company remains heavily dependent on a home market that’s increasingly hostile to its offerings.

EVXL’s Take

This story writes itself if you’ve been following our coverage. We warned in late November that Chinese EV profits just collapsed 33%, with BYD posting its worst profit drop in four years. The subsidy-fueled growth era is ending, and November’s sales figures are the latest receipt.

The irony is thick. BYD’s own executive called the price war “unsustainable” back in June. Now the company that sparked China’s brutal EV price war is paying the price alongside everyone else.

What’s most striking is the parallel to what we’ve tracked in the U.S. market since September. China’s December 31 tax credit cliff is the same story playing out across the Pacific: subsidy-dependent growth meets policy reality. Different countries, same pattern.

The PHEV collapse tells us something important. Chinese consumers aren’t just buying fewer BYD vehicles. They’re buying different vehicles. The shift from hybrids to pure electrics is accelerating, and BYD’s product mix hasn’t kept pace with changing preferences. When your plug-in hybrid sales fall for eight straight months while competitors like Xiaomi launch EVs that rack up hundreds of thousands of orders in hours, you have a product problem, not just a market problem.

As we noted when covering October’s numbers, this isn’t about one company losing to competitors. It’s about an entire industry drowning in overcapacity and suicidal pricing strategies. BYD created this price war. Now it’s trapped in the wreckage alongside everyone else.

The coming months will be brutal. Government subsidies are waning. Competition remains fierce. Margins are evaporating. But for consumers in China? There’s never been a better time to buy an EV.

What do you think about BYD’s sales slump? Can the company recover, or is this the beginning of a larger decline? Share your thoughts in the comments below.

Featured photo credit: BYD