BYD (HKG: 1211) sold 300,222 new energy vehicles in March 2026, down 20.5% from the 377,420 units delivered in March 2025, extending its streak of year-on-year monthly declines to seven consecutive months.

The result was the Shenzhen-based automaker's weakest March since 2024, despite a 57.9% recovery from February's 190,190-unit tally — itself the product of the Lunar New Year lull. The month-on-month rebound, while steep, was not sufficient to reverse the year-on-year trajectory that has dogged BYD since August 2025.

Passenger vehicles accounted for 295,693 of March's total, down 20.4% year-on-year. Battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) were near-equally split, at 147,601 and 148,092 units respectively, reflecting continued strong consumer appetite for plug-in hybrid models as BYD's DM (Dual Mode) technology remains a key purchase driver.

The deeper story lies overseas. Overseas sales hit 120,083 units in March, a 65.1% jump year-on-year and the highest monthly export tally in three months.

The surge coincided with the Iran oil shock, which disrupted shipments through the Strait of Hormuz and lifted fuel costs across Asia-Pacific, triggering stronger EV demand in markets including Australia, Japan, South Korea, and New Zealand. BYD showrooms across the region reported elevated traffic as petrol prices climbed.

That export performance has become indispensable. China's domestic NEV market remains locked in a severe price war, compressing margins across the industry.

BYD's share of China's EV market has declined from roughly 27% a year ago to around 17% in early 2026, as rivals including Xiaomi, Leapmotor, Nio (NYSE: NIO), and Zeekr — a brand of Geely (HKG: 0175) — posted strong year-on-year gains. Xiaomi's YU7 SUV, for instance, ranked among China's best-selling passenger vehicles in January.

The structural headwinds showed up in BYD's 2025 annual results, published in late March. The company reported CNY 804 billion (c. $110.4 billion) in revenue, up just 3.5% — its weakest growth rate in six years — while net profit attributable to shareholders fell 19% to CNY 32.6 billion (c. $4.5 billion), the first annual decline since 2021.

Gross margin narrowed to 17.74%, the lowest in three years. China's phased rollback of purchase subsidies, which historically favoured BYD's core budget segment, compounded the pressure from the ongoing price war.

For the first quarter of 2026, BYD delivered 700,463 NEVs in total, down 30.0% year-on-year and 47.8% below the fourth quarter of 2025 — a steep sequential drop reflecting seasonal patterns and worsening competitive dynamics. First-quarter overseas sales reached 321,165 units, underscoring the rising weight of international markets in BYD's volume mix.

Management has responded with an accelerated export push. BYD raised its 2026 overseas sales target to 1.5 million units in late March, a 15% upgrade from the 1.3-million-unit guidance issued in January and a year-on-year growth rate of roughly 43% against 2025's 1.046 million overseas deliveries. The company has also boosted research spending by 31% to fund global product development, even as margin pressure mounts at home.

Whether the Iran shock's tailwind will outlast its geopolitical catalyst — or whether domestic market share erosion deepens further — may well determine if BYD's seventh month of decline becomes its last.