BYD Shares Fall After H1 Profit Slumps Over 20% Amid China EV Price War

Shares of BYD Co. (HK:1211) fell sharply on Tuesday after the electric vehicle giant reported a significant decline in first-half profit, highlighting the severe impact of an intense price war in its home market of China.

The company's stock dropped 5.5% to trade at HK$86.90 in Hong Kong, becoming one of the biggest weights on the broader Hang Seng Index, which fell 0.9% during the session.

First-Half Earnings Disappoint

BYD's earnings report for the first half of 2026 revealed persistent headwinds from fierce competition. The results failed to meet investor expectations, triggering a sell-off.

Key figures from the report include:

• Net profit attributable to shareholders: 12.33 billion yuan, a decrease of 20.5% year-on-year.
• Revenue: 344.82 billion yuan, down 7.1% from the same period last year.

Price War Takes Its Toll

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The weaker performance reflects what the company described as sluggish domestic demand and fierce competitive conditions. An industry-wide price war has eroded margins for many automakers in China.

The aggressive price cuts were largely initiated after Beijing scaled back key consumer trade-in subsidies, forcing EV manufacturers to lower prices to maintain sales volume and market share.

A Mixed Financial Picture

Despite the weak first-half results, the company showed some underlying strength in the second quarter. BYD reported that its Q2 net profit rose 30% year-on-year to 8.2 billion yuan.

However, this second-quarter improvement was not enough to offset the broader first-half decline or reassure the market. Management noted that while its domestic market remains challenging, it continues to see growth from overseas expansion and its premium sub-brands, such as Denza and FANGCHENGBAO.