China’s BYD is facing its worst quarterly profit fall since 2020, according to its Q1 2026 earnings report released on Tuesday.

The report shows that the Chinese-backed EV maker’s net profit dropped 55.4% from a year ago to 4.1 billion yuan, or about $599.46 million, amid weaker sales in China and increased competition.

BYD’s revenue also fell 11.8% to 150.2 billion yuan, which kept the company on a three-quarter sales slide, though the EV maker had already reported a 38.2% profit drop in the fourth quarter.

The company is still the biggest EV seller on earth after overtaking Tesla a few months ago, but its main business has long sat around cheaper models priced below 150,000 yuan, or about $21,931.43.

BYD leans on overseas sales and faster charging as China’s EV price war keeps hurting its earnings

According to the earnings report, BYD has actually been more focused on selling its cars internationally and says it believes it’ll be able to sell 1.5 million cars or more outside China in 2026, which would mean growth of over 40% from 2025, though BYD has not given a full sales target for the whole company from Cryptopolitan’s observations.

The international plan is tied to newer technology, more local production, and bigger sales outside China, according to Tuesday’s earnings report.

BYD is also trying to win over drivers with its ultra-fast charging, since charging time remains one of the biggest reasons many buyers avoid EVs. If drivers can charge faster, BYD gets a better shot at pulling more people away from petrol cars.

At the Beijing auto show on Friday, BYD began pre-sales for the Datang, a full-size electric SUV. Meanwhile, President Xi Jinping is cutting back trade-in subsidies for cheaper electric cars and plug-in hybrids, the exact part of the market where BYD built much of its scale. The company’s overall sales fell for a seventh month in a row in March, even as overseas shipments continued to rise rapidly.

European lawmakers question the ethics of BYD’s Hungary factory

BYD is also facing political pressure in Europe. The company has become the first Chinese business to be raised in the European Parliament over labor abuse claims tied to a Chinese-owned auto factory in the European Union.

The claims involve contractors working on BYD’s Hungary factory. A report published on April 14 by China Labor Watch, a New York-based watchdog, alleged that thousands of workers at the site were made to work seven days a week. Some shifts were said to last more than 12 hours.

China Labor Watch said it interviewed 50 workers and visited the factory site three times since October 2025. The group said many workers were from China. It also said rest days were mostly available only when bad weather stopped construction.

The watchdog, which has tracked labor conditions since 2000, shared its findings with EU government representatives. Earlier this month, three members of the European Parliament formally asked the European Commission about the Hungary claims.

The case comes as Europe is trying to bring more EV production into the bloc. The EU raised tariffs on China-made electric cars in 2024 to support local manufacturing. Even with those tariffs, China-made vehicles accounted for a record 9.3% of new-car sales in the EU in December, according to Rhodium Group data.

BYD is gaining ground there too. New BYD registrations in the EU more than doubled in the first two months of the year to 29,291, topping Tesla and giving BYD a 1.8% share of the market, based on data from the European Automobile Manufacturers’ Association.

By model, the BYD Seal U ranked third for January registrations, behind models from Renault (RNO.PA) and Skoda, which is part of Volkswagen (VOW3.DE). European Commission data also showed that more than two-thirds of new passenger cars sold in Europe in January were electric.

Hungary has taken the largest share of China’s rising auto investment in Europe over the last three years, based on Rhodium Group figures. BYD’s Szeged plant is planned for 300,000 cars a year at full capacity, though the company has not given a clear timeline for reaching that level.

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